Agriculture loans

Notable Features of the KCC Scheme:

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  All nationalised banks and some private banks offer the Kisan Credit Card. 
  
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  The loan can be availed by small farmers, sharecroppers, tenant farmers, SHGs, and others involved in agricultural activities. 
  
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  The amount of finance sanctioned for a farmer depends on several factors like – credit history of the farmer, farm assets, size of cultivated area, etc. 
  
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  The KCC card also offers personal accident insurance cover to the farmer and is valid for 5 years.
  
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  Today, several banks offer the KCC card as a smart card that the farmer can also use to meet other expenses.
  
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  The interest rate charged on the amount borrowed ranges from 3% to 7%. Farmers can enjoy lower interest rates when they repay the borrowed amount quickly. 
  
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  The documentation required for this scheme is minimal. It includes the duly-filled application form, ID proof, address proof, declaration of the crops raised, etc.
  
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  No collateral is required for the KCC. 
  

2. 
   Agriculture Term Loan 
   

The term loan has a longer tenure than the crop loan. It's provided for larger agriculture-related expenditures like the purchase of machinery, pump-sets, upgrading the farm facilities, installation of solar power motors, etc.
Notable Features of Agriculture Term Loans:

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  The eligibility criteria vary from one bank to another. The RBI has notified banks to offer agriculture term loans to Rs. 1 lakh without any collateral. Term loans are provided to individual farmers, sharecroppers, groups of farmers, SHGs, etc.
  
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  Banks have created various subcategories of agriculture term loans like horticulture loans, beekeeping loans, dairy farming loans, etc. to cater to niche sectors.
  
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  The loan amount ranges from a few thousand rupees to tens of lakhs of rupees, depending on the lender, the creditworthiness and repayment capacity of the farmer. 
  
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  The tenure of agriculture term loans ranges from 3 to 15 years. 
  
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  The interest rates of agriculture term loans are competitive and less when compared to other loans in the market. 
  

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