Advantages and Eligibility of the KCC Scheme to the Farmers

Even though the agrarian sector is one of the most important in the Indian economy, several cultivators and other individuals directly associated with this sector do not have access to institutional credit. As per a survey, around 60% of small and marginal farmers in India are unable to avail formal agricultural credit from financial institutions.

Hence, they are forced to depend on moneylenders from the unorganised sector to purchase products such as seeds, fertilisers, pesticides as well as farm tools. However, this leads the farmer into a debt trap in most cases due to exceedingly high interest rates that such lenders levy. 

That’s why the National Bank of Agriculture and Rural Development (NABARD) launched the scheme of Kisan Credit Card in 1998 to prevent exploitation of farmers by moneylenders. Under this scheme, farmers can avail short-term credit as well as term loans at competitive interest rates. Furthermore, the repayment period within this scheme is aligned with the crop harvesting period to ease the burden of repayment. Apart from these features, there are other advantages that eligible applicants can avail.

Advantages of Kisan Credit Card

Some of the main advantages of Kisan Credit Card have been explained below – 

• Meet a range of expenses – 

The Kisan Credit Card enables an individual to fund an array of expenses. It includes purchasing seeds, fertilisers, pesticides, buying or installing of farming equipment, rearing of farm animals, birds, fish, and marketing of crops. Beneficiaries can also cover their household expenses with a Kisan Credit Card. 

• Simplified disbursal – 

The disbursal process under this scheme is simple so that a more significant number of individuals, including those who cannot read or write properly, can avail credit easily. Some of the ways via which credit disbursal scheme takes place are as follows – 

1. ATM withdrawal
2. Withdrawal via cheque
3. Disbursal through the branch
4. Transactions via mobile applications

The Kisan Credit Card also facilitates transactions through POS terminals. 

• Insurance plan

The Kisan Credit Card scheme also comes with a personal accident cover. Under this policy, eligible beneficiaries can avail substantial financial aid in case of the beneficiary’s death or disability. 

Eligible beneficiaries 

• Individuals and joint borrowers who are owners as well as cultivators
• Joint liability group or self-help group of tenant farmers, sharecroppers
• Poultry farmers, fish farmers (inland and marine), and dairy farmers, which also include joint liability groups, joint borrowers, self-help groups etc.

Additionally, applicants should be between 18 and 75 years of age to qualify for a Kisan credit card.

Several financial institutions in India offer a Kisan Credit card. Applicants can easily apply for a Kisan Credit Card by going to their official website. This allows a prospective cardholder to apply online for a credit card in minimum time. Individuals can also visit the branch of such lenders to apply for this scheme.

However, since Kisan credit cards are targeted towards a particular group, not everyone can avail the benefits offered within the scheme. They can, therefore, consider other credit cards that complement their spending needs. It will not only enable them to avail the maximum utility offered by a credit card, but they will also be able to save a significant amount monthly or annually. 

For instance, individuals who are required to commute every day to transport crops or other produces can consider opting for a fuel credit card which offers discounts, cashback, and surcharge waivers of refuelling from partner petrol stations. Thus, an individual needs to know how to choose the right credit card for themselves.

On the other hand, individuals who are planning to use a credit card only for the purchase of big-ticket items can consider opting for cards like Bajaj Finserv RBL Bank SuperCard. It allows users to pay the large purchases on their credit card by converting it into affordable EMIs, thus aiding in easy repayment. 

Before applying for such a card, individuals may look into pre-approved offers, which aid in fast-tracking the application procedure. Besides credit cards, one can avail those offers on other financial products too, such as business loans, personal loans, etc. One can quickly check their pre-approved offers by entering minimal information like their name and contact information. Nevertheless, despite the type of credit card one opts for, one should remember to use it responsibly, which includes knowing how to read credit card statement correctly. It applies to Kisan Credit Card beneficiaries as well, since financiers levy extra interest on late payments.