Under this scheme, short term agriculture loan up to Rs. 3.00 lakh is available to farmers engaged in Agriculture and other allied activities including Animal Husbandry, Dairying, Poultry, fisheries etc. at the rate of 7% p.a. An additional 3% subvention (Prompt Repayment Incentive - PRI) is also given to the farmers for prompt and timely repayment of loans. Therefore, if a farmer repays his loan on time, he gets credit at the rate of 4% p.a. For enabling this facility to the farmers, Government of India provides Interest Subvention (IS) to the Financial Institutions offering this scheme. This support is 100% funded by the Centre, it is also the second largest scheme of DA&FW as per budget outlay and coverage of beneficiaries.

  • Under the scheme, the benefit of 1.5% interest subvention is available to banks involved for extending credit support up to ₹3 lakh at 7% interest per annum to Small and Marginal farmers (SF/MF) having Kisan Credit Card.

  • The interest subvention provided in cases of natural calamities applies to restructured loans for affected farmers. This interest relief is available for a limited period depending on the severity of the calamity.

  • Farmers can further benefit from an additional 3% Interest subvention if they exhibit prompt and timely repayment of loans. This incentive effectively reduces the interest rate to 4% per annum for farmers who repay their loans punctually.

  • The scheme, covered only public sector banks (PSBs) and private sector banks (PVBs) (in respect of loans given by their rural and semi-urban branches only)