The government is stepping up efforts to expand farmer access to institutional credit, with a strong push on digital platforms and a key role for cooperative and rural banks.
Replying to a question in the Lok Sabha on Monday, Union Minister of State for Finance Pankaj Chaudhary said a series of measures have been undertaken to scale up the reach of the Kisan Credit Card (KCC) scheme, particularly among small and marginal farmers.
A major focus area is the digitisation of credit delivery through cooperative and rural banking channels. The minister noted that NABARD has introduced an e-KCC platform for Regional Rural Banks and Rural Cooperative Banks, enabling farmers to apply for loans without visiting branches.
In addition, banks in states like Maharashtra and Madhya Pradesh have been onboarded onto the Jan Samarth portal, a unified digital platform that links various government-sponsored loan schemes, including KCC, making the process faster and more transparent.
Policy support from the Reserve Bank of India continues to drive agricultural lending. Under Priority Sector Lending norms, banks, including Urban Cooperative Banks, are required to allocate at least 18% of their adjusted net bank credit to agriculture, with a specific sub-target of 10% for small and marginal farmers. These guidelines are aimed at ensuring equitable distribution of credit, particularly in underserved districts.
To further ease access, the collateral-free loan limit for short-term agricultural credit has been increased from Rs 1.6 lakh to Rs 2 lakh per borrower with effect from January 1, 2025.
Farmers also benefit from the Modified Interest Subvention Scheme, under which loans are available at 7% interest, with an additional 3% incentive for timely repayment, effectively reducing the rate to 4%.
The scope of KCC has also been broadened beyond crop loans to include allied activities such as animal husbandry, dairying and fisheries, thereby strengthening rural livelihoods. At the same time, awareness campaigns and financial literacy programmes are being conducted by RBI, NABARD and banks to educate farmers about the benefits and features of the scheme.
On customer protection and service quality, the government and RBI have strengthened grievance redressal systems. These include the Integrated Ombudsman Scheme, the CPGRAM portal for lodging complaints, and regular district-level review meetings to address banking-related grievances. Banks have also been directed to maintain whistleblower mechanisms in line with regulatory guidelines.
Overall, the measures reflect a coordinated effort to leverage cooperative institutions, digital infrastructure and policy mandates to deepen financial inclusion and improve timely access to affordable credit for farmers across the country.
