By maintaining momentum on agri-credit reforms and strengthening institutional support, the government signals its continued commitment to farmer welfare, rural prosperity, and sustainable agricultural growth.
In a major step to reinforce credit access for millions of Indian farmers, the Union Cabinet on Wednesday approved the continuation of the Modified Interest Subvention Scheme (MISS) for the financial year 2025–26. This move reaffirms the government’s commitment to affordable agricultural financing, with the Kisan Credit Card (KCC) platform continuing to serve as the main conduit for short-term crop loans.
Under the scheme, a 1.5 per cent interest subvention will be provided to banks on crop loans up to ₹3 lakh. With the inclusion of a 3 per cent Prompt Repayment Incentive (PRI) for timely repayment, farmers will be able to avail themselves of short-term agricultural credit at an effective interest rate of just 4 per cent – one of the lowest globally.
Affordable, Accessible Credit for All Farmers
The extension of the scheme brings continued relief to the farming community, particularly small and marginal farmers who comprise the majority of India’s agricultural sector. Currently, 76 per cent of all agricultural credit accounts are held by smallholder farmers, underscoring the scheme’s inclusive reach.
Through the KCC framework, farmers benefit from revolving credit facilities for up to five years. This flexible structure allows them to draw and repay funds as per their seasonal requirements without having to reapply for loans each season.
In the event of natural calamities, the scheme also offers interest relief for up to one year. For cases involving more severe disasters, interest subvention can be extended for up to five years, providing crucial support during times of distress.
Additionally, loans of up to ₹2 lakh under KCC can be availed without any collateral, reducing financial barriers and empowering more farmers to access credit.
Credit Growth Mirrors Scheme’s Impact
Since its revamp, the KCC and MISS frameworks have played a transformative role in India’s agricultural credit landscape. Credit flow through KCCs has more than doubled over the past decade, increasing from ₹4.26 lakh crore in 2014 to ₹9.81 lakh crore in 2024. Simultaneously, overall agricultural credit flow surged from ₹7.3 lakh crore to ₹25.49 lakh crore, indicating the growing institutional footprint in rural finance.
A significant indicator of success is the rise in institutional credit, which now accounts for over 75 per cent of total farm credit — a shift that has significantly reduced farmers’ reliance on informal moneylenders who often charge exorbitant interest rates.
Moreover, improvements in credit performance are visible. Non-Performing Assets (NPAs) in the agricultural sector dropped from 8.9 per cent in 2019 to 7.2 per cent in 2023. Specifically, NPAs under the KCC scheme declined from 12.66 per cent in 2021–22 to 11.5 per cent in 2023–24, reflecting better repayment behavior and more robust loan recovery mechanisms.
Technology for Transparency: The Kisan Rin Portal
To further streamline the scheme, the government has operationalized the Kisan Rin Portal (KRP), a digital platform designed to monitor and manage interest subvention claims. By digitizing the process, KRP ensures faster disbursement of claims, increased transparency, and greater accountability for both banks and farmers.
This digital push is part of the government’s broader strategy to modernize agricultural financing systems and make credit delivery more efficient.
While Wednesday’s Cabinet decision ensures the uninterrupted continuation of the interest subvention scheme, discussions are underway to enhance the KCC loan ceiling to ₹5 lakh — a proposal that was outlined in the Union Budget 2025. Once implemented, this enhancement is expected to further empower farmers and expand access to working capital, particularly for those scaling up operations or diversifying crops.
