“Over 71 lakh farmers in Uttar Pradesh have embraced the Kisan Credit Card scheme in 2024-25, with plans to include 25 lakh more in 2025-26. Offering loans up to ₹5 lakh at a low 4% interest rate, the initiative supports cultivation, allied activities, and household needs, reducing reliance on moneylenders and boosting agricultural productivity.”
Kisan Credit Card Empowers UP Farmers with Affordable Loans
In a significant boost to Uttar Pradesh’s agricultural sector, the Kisan Credit Card (KCC) scheme has emerged as a lifeline for farmers, providing easy and affordable credit access. As of May 2025, over 71 lakh farmers in the state have availed KCCs in the 2024-25 financial year, with the Uttar Pradesh government targeting an additional 25 lakh farmers for inclusion in 2025-26. This ambitious initiative aims to reduce dependency on private moneylenders and enhance financial inclusion for small and marginal farmers.
The KCC scheme, a central government initiative, offers farmers loans up to ₹5 lakh at a subsidized interest rate of 7%, which can drop to an effective 4% for prompt repayment due to a 2% interest subvention and a 3% prompt repayment incentive. This financial support covers a wide range of needs, including crop cultivation, post-harvest expenses, farm maintenance, and allied activities such as dairy, poultry, and fisheries. For animal husbandry and fisheries, loans up to ₹2 lakh are available at similar concessional rates.
The scheme’s flexibility is a key feature. Farmers can access short-term credit for immediate needs like purchasing seeds, fertilizers, and pesticides, as well as long-term loans for investments in farm equipment, irrigation systems, or land development. The KCC operates as a revolving cash credit account, valid for five years with annual reviews, ensuring farmers have continuous access to funds without the need to reset the account balance to zero.
In Uttar Pradesh, the state government’s proactive approach has streamlined the KCC application process. Banks have been directed to issue KCCs within two weeks of application submission, with no processing or inspection fees for loans up to ₹3 lakh. This eliminates financial burdens for farmers and speeds up credit delivery. Additionally, the collateral-free loan limit has been raised to ₹1.6 lakh, and for loans up to ₹3 lakh with tie-up arrangements, no collateral is required, making the scheme accessible to tenant farmers, sharecroppers, and self-help groups.
Digital advancements have further enhanced the scheme’s efficiency. The Kisan Rin Portal, launched in August 2023, has improved transparency and reduced turnaround time for loan processing. Union Bank of India, for instance, offers a Digital KCC product, enabling farmers to apply for loans up to ₹1.6 lakh online without visiting a branch. Using satellite imagery and Aadhaar-based e-signing, the process is completed in minutes, with automated loan sanctioning and disbursal.
The scheme’s impact is evident in the numbers. Nationwide, KCC has facilitated over ₹10 lakh crore in financial assistance to more than 7.7 crore farmers, with Uttar Pradesh playing a significant role in this growth. The state’s agricultural credit flow has surged, aligning with the national increase from ₹7.3 lakh crore in 2013-14 to ₹25.49 lakh crore in 2023-24. This has bolstered productivity and supported rural economies.
Farmers in UP have also benefited from integration with the PM-KISAN scheme, which provides ₹6,000 annually in three instalments. This income support complements KCC loans, enabling farmers to meet both immediate and long-term financial needs. The extended repayment tenure of up to 48 months offers further flexibility, particularly for those with existing dues, provided interest payments are maintained.
Banks like SBI, ICICI, Axis, and Indian Bank have tailored their KCC offerings to meet diverse needs, providing RuPay Kisan Cards for seamless transactions and free accidental insurance coverage up to ₹50,000. The scheme also supports crop insurance under the Pradhan Mantri Fasal Bima Yojana, adding a layer of security for farmers against natural calamities.
Despite these advancements, challenges remain. Some farmers, like one from Shamli, have reported issues with interest subvention withdrawals, forcing them to repay loans at higher rates. The government and RBI are working to address such concerns, ensuring consistent benefits across regions.
The KCC scheme’s expansion in Uttar Pradesh underscores a commitment to empowering farmers with timely, affordable credit, fostering self-reliance, and driving agricultural growth. With ongoing digital reforms and increased outreach, the initiative is set to transform the state’s farming landscape.
Disclaimer: This article is based on information sourced from government announcements, bank websites, and recent posts on X. Data is accurate as of August 2025, but readers are advised to verify details with official sources or banks for the latest updates.