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.

About me

ramandeep singh

My name is Ramandeep Singh. I authored the Quantitative Aptitude Made Easy book. I have been providing online courses and free study material for RBI Grade B, NABARD Grade A, SEBI Grade A and Specialist Officer exams since 2013.

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