PM Modi govt offers Rs 5 lakh loan an interest of 4 per cent

PM Modi: The Kisan Credit Card (KCC) scheme is a government initiative to provide farmers with timely and affordable credit for their agricultural needs. Narendra Modi govternment offers Rs 5 lakh loan an interest of 4 per cent.

While the standard interest rate is often higher, farmers can effectively get a loan at an interest rate as low as 4% per annum through a combination of interest subvention and a prompt repayment incentive.

Here’s how it works:

Initial Interest Rate: The base interest rate for KCC loans is typically around 7% per annum for short-term crop loans up to Rs 3 lakh.

Interest Subvention: The Government of India provides an interest subvention of 2% on this loan amount. This reduces the effective interest rate to 5%.

Prompt Repayment Incentive: An additional incentive of 3% is provided to farmers who repay their loans on time. This brings the final, effective interest rate down to 4%.

It is important to note that the Union Budget 2025-26 has announced an increase in the loan limit under the Modified Interest Subvention Scheme from Rs 3 lakh to Rs 5 lakh, which would further benefit the farmers.

Eligibility and How to Apply:

To get a Kisan Credit Card, you can visit a public or private sector bank, such as SBI, HDFC Bank, or Axis Bank. The eligibility criteria generally include:

Being an individual or joint farmer, including tenant farmers and sharecroppers.

Being a member of a Self Help Group (SHG) or Joint Liability Group (JLG).

Being between 18 and 75 years of age. For senior citizens, a co-borrower who is a legal heir is often required.

The application process typically requires the following documents:

Application form

Passport-size photographs

Proof of identity (Aadhar Card, Voter ID, etc.)

Proof of address

Proof of landholding, verified by revenue authorities.

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