Over 77 Million Indian Farmers Benefit from Government-Backed Low-Interest Credit Scheme

02 June 2025, New Delhi: India’s Modified Interest Subvention Scheme (MISS), a flagship credit support initiative of the Government of India, has emerged as a financial lifeline for over 77.5 million farmers across the country. With the recent Cabinet approval to extend the scheme into the 2025–26 financial year, the government reaffirmed its commitment to providing timely and affordable credit to the agricultural sector — a critical pillar of India’s economy.

Empowering 7.75 Crore Farmers Through Institutional Credit

At the core of this support is the Kisan Credit Card (KCC) platform, which provides short-term crop loans at subsidised interest rates. As of now, India has issued over 7.75 crore (77.5 million) KCC accounts. These accounts empower farmers to access credit during crucial agricultural cycles — for seeds, fertilisers, pesticides, irrigation, and post-harvest operations — without resorting to informal or exploitative lending sources.

The scale of this reach demonstrates the government’s strong focus on financial inclusion for small and marginal farmers, who constitute the majority of India’s farming population. It also reflects the deep integration of formal credit systems within the rural economy.

Affordable Interest Driving Credit Uptake

Under MISS, farmers can borrow up to ₹3 lakh (approximately USD 3,600) at a base interest rate of 7%, with a 1.5% interest subvention provided to lending institutions. Farmers who repay their loans promptly receive a 3% Prompt Repayment Incentive (PRI), effectively reducing their interest burden to just 4%. This low-cost financing has become an essential enabler for agricultural input purchase and risk management.

For farmers engaged in allied sectors like animal husbandry and fisheries, the scheme offers similar benefits on loans up to ₹2 lakh (USD 2,400), promoting diversification and integrated farming.

A Decade of Rapid Expansion

The number of KCC holders has steadily grown over the past decade due to government campaigns, simplified application processes, and digital onboarding initiatives. Institutional credit disbursed through KCCs surged from ₹4.26 lakh crore in 2014 to ₹10.05 lakh crore by the end of 2024. This credit flow is essential for India to meet its growing food security needs and support rural employment.

In total, the agricultural credit flow in India has grown from ₹7.3 lakh crore in FY 2013–14 to ₹25.49 lakh crore in FY 2023–24. Much of this expansion is directly linked to policy support through schemes like MISS, which reduce borrowing costs and improve access.

Technology Aiding Transparency and Reach

With the launch of the Kisan Rin Portal (KRP) in 2023, the government has introduced a real-time digital interface for interest subvention claim processing. This move has increased operational efficiency and reduced delays in credit disbursement — further boosting farmer confidence in formal banking systems.

Global Significance and Agri-Business Opportunities

For international agri-businesses, banks, fintech players, and development organisations, the scale of MISS presents a unique case study in effective credit outreach. Supporting nearly 78 million farmers through a single, unified platform positions India as a global leader in rural financial inclusion through structured government intervention.

The continuation of MISS until 2025–26 reinforces policy continuity and signals a stable environment for those seeking to partner in India’s agriculture and rural development journey.

Conclusion: A Model of Mass-Scale Financial Inclusion

India’s Modified Interest Subvention Scheme is more than just a subsidy — it is a structured financial inclusion tool that directly supports nearly 60% of India’s agricultural households. With over 77 million beneficiaries, it offers a replicable model for other emerging economies seeking to connect farmers with formal credit channels. As the scheme moves into its next phase, it will remain a cornerstone of India’s rural transformation and agricultural resilience.

Also Read: National Roundtable Calls for Urgent National Policy on Weed Management to Safeguard Food Security

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