Kisan Credit Card: Collateral-Free Loan Limit to Remain at ₹2 Lakh
Good news for farmers! The collateral-free loan limit under the Kisan Credit Card (KCC) scheme has been increased from ₹1.6 lakh to ₹2 lakh per borrower, effective January 1, 2025. This is a significant step towards making credit more accessible without the need for collateral.
However, the government has clarified that there are no current plans to increase this collateral-free limit further beyond ₹2 lakh.
While the collateral-free portion is capped at ₹2 lakh, the overall loan limit under the Modified Interest Subvention Scheme (MISS) for KCC loans has been substantially increased from ₹3 lakh to ₹5 lakh. This was announced in the Union Budget 2025-26, offering greater financial support for agricultural needs.
Boosting Access to Formal Credit
These initiatives are part of the government’s broader strategy to reduce farmers’ reliance on informal lending sources and provide wider access to formal credit in the agricultural sector.
Making KCC More Accessible: Key Initiatives
The government has taken several steps to ensure more farmers can benefit from the KCC scheme:
- Expanded Coverage: In 2019, the scheme was broadened to include working capital requirements for animal husbandry, dairying, and fisheries.
- Awareness Campaigns: Various awareness programs and Information, Education, and Communication (IEC) campaigns are continuously conducted by Union/State Governments, RBI, NABARD, and banks to highlight the benefits of KCC.
- KCC Saturation Drive: Under the Atma Nirbhar Bharat Abhiyan, a special drive was launched to extend KCC to all eligible farmers. Additionally, nationwide district-level weekly camps are organized to raise awareness among farmers involved in Animal Husbandry, Dairy, and Fisheries (AHDF).