‘Kisan Credit Card users in Dindigul are taking out one-time loans’: Experts
DINDIGUL: A large number of farmers in Dindigul district fail to use Kisan Credit Cards (KCC) as they use cheques to withdraw the entire loan amount from banks in one shot. Some of them use the loan money for personal purposes, say experts from banking and agricultural sectors. Approximately 24,000 farmers have not activated their cards, rendering them useless.
According to official records, around 1,17,715 farmers in Dindigul have received government loans and hold Kisan Credit Cards (KCC). As of September 30, 2024, they had received Rs 484.46 crore as farm loans. However, only about 93,438 farmers have activated and used their KCC cards, leaving approximately 24,277 farmers without access to this facility.
“The entire loan amount is allocated based on the specific crop,” an official from Lead Bank (Dindigul) told TNIE.
“The amount varies depending on the crop. Many farmers don’t wait for each stage of disbursement and withdraw the entire sum in a single cheque. For instance, if the loan for a particular crop is Rs 1 lakh per acre, it could be divided into Rs 5,000 for sowing, Rs 20,000 for fertiliser, and so on. The KCC card can be used for each expense at each interval. However, they don’t wait for each segment and complete one transaction, rendering the card’s purpose useless,” he said.
P Selvaraj, a farmer from Oddanchatram, said, “I have been using KCC cards for several years. I withdraw money only when needed, such as for seed purchases or fertiliser. Interest is charged on every loan, even small ones. However, some farmers withdraw the entire loan amount at once. There are many reasons for this.
Some don’t want to wait for the next phase of disbursement. Others use the money for non-agricultural purposes. When the entire amount is withdrawn in a single transaction, the KCC card becomes redundant.”
The maximum credit limit for a Kisan Credit Card (KCC) varies; it is fixed at Rs 3 lakh for individual and small farmers. The KCC loan limit is calculated based on the Scale of Finance (SoF), which is supervised by the State Level Technical Committee (SLTC). The SoF is determined by considering the agricultural practices and recurring expenses for particular crop production activities.
K Vadivel, Coordinator of the Tamil Nadu Farmers Protection Association (Dindigul), said, “Many farmers struggle to obtain farm loans. They often become frustrated. When they finally secure a loan, their natural tendency is to withdraw the entire sanctioned amount to avoid multiple transactions.”
