Institutional Credit Schemes for Farmers

Published on Thursday, August 23, 2018
Institutional Credit Schemes for Farmers


  • For providing hassle-free crop loans to farmers including Small Farmer Marginal Farmer.

Nodal Agency

  • The Government of India
  • Reserve Bank of India (RBI)
  • National Bank for Agriculture and Rural Development (NABARD)
To promote institutional credit to farmers, The Government of India, has taken the following major initiatives, some of these schemes are:
  1. Interest Subvention Scheme (ISS)
  2. Kisan Credit Card (KCC) Scheme

Interest Subvention Scheme (ISS)

  • Provide short term crop loans up to Rs. 3.00 lakh at a subsidised interest rate for a period of one year.
  • If farmers make prompt repayment, additional 3% incentive is given, thereby reducing the effective rate of interest to 4%.
  • For providing Short Term Credit to farmers at subsidized rate of interest, Interest subvention is provided to
    • NABARD, 
    • Regional Rural Banks,
    • Cooperative Banks, 
    • Public Sector Banks and scheduled Private Sector Banks.
  • Expenditure is being partly funded from Krishi Kalyan Kosh.

Kisan Credit Card (KCC) Scheme

  • It enables farmers not only purchase agricultural inputs such as seeds, fertilisers, pesticides, but also draw cash to satisfy their agricultural and consumption needs.
  • Covers all farmers including tenant farmers, oral lessees and share croppers.
  • On the base of land holding and crops grown including post-harvest warehouse storage related credit needs and other farm expenses, a flexible limit of Rs. 10,000 to Rs. 50,000 has been provided to marginal farmers.
  • The term loan component will be normally repayable within a period of 5 years.

Government has also taken the following measures to relieve the debt burden of farmers:

  • An additional grace period of 60 days for prompt repayment incentive @ 3% will be provided to such of the farmers whose crop loans dues fell due between 01/11/2016 to 31/12/2016 and if such farmers repaid the same within 60 days from their due date in this period.
  • Also grant interest waiver for two months (November and December, 2016) for all short term crop loan availed from Cooperative Banks between 01.04.2016 to 30.09.2016.

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