Kisan Credit Cards and Farm Loans

How farmers borrow to buy inputs, how Kisan Credit Cards offer cheap crop loans, and why many farmers still rely on moneylenders.

Farmers need credit to buy inputs before harvest.

Kisan Credit Card

Launched in 1998, the Kisan Credit Card (KCC) gives farmers a credit limit for crop needs.

Interest subvention: short-term crop loans up to 3 lakh rupees at 7 percent, falling to 4 percent with prompt repayment.
The limit was raised to 5 lakh rupees in the 2025 Budget.
Extended to animal husbandry and fisheries.

Coverage

Crores of KCC accounts exist, though not all are active.

Why moneylenders persist

Tenant farmers without land titles can’t easily get bank loans.
Paperwork and delays at banks.
Emergencies needing quick cash.
Moneylenders and input dealers lend on credit, often at high interest.

Loan waivers

State governments have announced farm loan waivers, which give relief but can weaken repayment culture and bank lending.

Digital lending

Land records digitisation and new platforms aim to make KCC loans faster.

Two loans

A landowning farmer gets a KCC loan at 4 percent after prompt repayment. His neighbour, a tenant farmer without papers, borrows from a moneylender at over 24 percent a year.

Thinking all farmers access cheap bank credit

Tenant and small farmers often rely on costly informal loans.

Key takeaways

KCC, launched in 1998, gives farmers cheap crop loans.
Effective interest can fall to 4 percent with prompt repayment.
Tenant farmers often rely on moneylenders.
Loan waivers give relief but affect repayment culture.