The Hindu Business Line : Nabard expands scope of kisan credit cards

IN a bid to meet the entire credit requirements of farmers, the National Bank for Agriculture and Rural Development (Nabard) has expanded the scope of the kisan credit card scheme to include capital and personal expenses of agriculturists.

According to the amended scheme notified last month, a farmer can now take loans not only for crops but also take term credit for purchasing capital equipment such as a tractor or implements.

In addition, farmers can also take loans to meet their contingency expenses through the kisan card.

"Feedback from the field had highlighted the need for a broad-based credit delivery scheme that acts as a single window for all credit requirements of farmers. It is hoped that the enlarged kisan credit card scheme would cater to the comprehensive credit requirements of farmers," the Nabard Chief General Manager (Gujarat), Mr Bhawar Puri, told Business Line here.

The kisan credit card scheme had been introduced in 1998 as a credit delivery mechanism for crop loans and now boasts of nearly 4.14 crore beneficiaries. Till now, farmers could only take loans for purchase of seeds or fertiliser, which had to be repaid at the end of the crop cycle. To finance their capital needs, farmers still had to approach banks or private moneylenders separately.

Mr Puri said under the amended scheme, banks would determine the value of the farmer's land and set a total exposure limit for the individual. While the bank's overall exposure would not exceed 75-80 per cent of the farmer's asset value, the individual would have the liberty to decide the quantum of loan under term and crop loans.

"The individual farmer would have the complete freedom to choose what capital equipment he wants for his farm. In addition, he would also be able to borrow a reasonable amount for contingencies like a family function or for his household expenditure if he wants to hold his produce for a while in anticipation of better prices," Mr Puri said.

Under the scheme, short-term and working capital loans are provided for a tenure up to one year on a revolving basis, while the tenure of the term loans can extend up to five years.

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