Credit Limit Assessment and Scale of Finance
KCC credit limits are assessed systematically based on operational landholding, proposed cropping pattern, and the district-level Scale of Finance (SOF) determined annually by District Level Technical Committees (DLTC).
For the first year, the sanctioned limit incorporates the cultivation cost for all crops plus 10 percent towards post-harvest/household consumption, plus 20 percent towards farm asset maintenance. The limit automatically steps up by 10 percent annually for a 5-year tenure.
- Assessment formula: District Scale of Finance x Crop Acreage + 10% Household + 20% Maintenance
- Five-year validity: Sanctioned card limit remains valid for 5 years with annual operational renewal
- Revolving credit: Operates as a revolving cash credit line; draw and repay as cash inflows dictate
- Flexibility: Multiple withdrawals and deposits permitted via RuPay KCC ATM debit cards
Concessional Interest Rates and Repayment Incentive
Under the Modified Interest Subvention Scheme (MISS) of the Central Government, KCC loans up to prescribed borrowing limits carry heavily subsidized interest rates.
While the standard benchmark lending rate is 7 percent per annum, the Government provides an additional 3 percent Prompt Repayment Incentive (PRI) for prompt repayments, resulting in an effective interest rate of just 4 percent per annum.
- Benchmark concessional rate: 7 percent per annum for short-term crop loans up to prescribed limits
- Prompt repayment incentive: 3 percent additional interest subvention for timely repayment within 1 year
- Effective borrowing rate: 4 percent per annum for disciplined borrowers
- Collateral-free borrowing: No mortgage or third-party surety required for loans up to prescribed institutional thresholds
Expansion to Animal Husbandry, Fisheries, and RuPay Cards
The Government of India expanded the KCC facility to cover working capital requirements for animal husbandry, dairying, and fisheries, providing concessional subvention for livestock farmers.
Beneficiaries receive a RuPay KCC debit card, enabling direct cash withdrawals at bank ATMs, micro-ATMs at PACS centers, and electronic point-of-sale transactions at input dealer shops.
- Allied sector coverage: Dedicated working capital limits for dairy cattle, sheep, goats, poultry, and fish culture
- RuPay KCC Card: Electronic magnetic-stripe / chip ATM debit card for direct input purchases
- Application channels: Apply through Primary Agricultural Credit Societies (PACS), commercial banks, or RRBs
- Crop insurance linkage: Mandatory/optional enrolment in PM Fasal Bima Yojana (PMFBY) based on farmer choice
Official source
Check the latest rules, benefits and forms here. KisanPe is an independent platform and is not a government website.
Ministry of Agriculture and Farmers Welfare ↗Related on KisanPe
Common questions
What is the effective interest rate for farmers who repay their KCC loan on time?
Farmers who repay within 12 months receive a 3 percent prompt repayment incentive, reducing the effective annual interest rate to just 4 percent.
What is the collateral-free loan limit under the KCC scheme?
Under RBI guidelines, agricultural crop loans up to 1.6 lakh rupees (and up to 2 lakh rupees in tie-up arrangements) are granted without requiring land mortgage collateral.
Can tenant farmers and sharecroppers obtain a Kisan Credit Card?
Yes, tenant farmers, oral lessees, and sharecroppers are eligible to apply individually or through Joint Liability Groups (JLGs).
General guidance, not personal advice. For your farm, ask your local Krishi Vigyan Kendra or agriculture officer.
More Government Schemes & Subsidies guides
Ask Sakhi AI in your language, check live mandi prices or plan a loan with KisanPe tools.