Impact of Kisan Credit Card Scheme on Financial Inclusion in Agricultural Sector

The Kisan Credit Card Scheme was a step towards facilitating the access to short-term credit for the borrowers from the formal financial institutions. The scheme was conceivedas a uniform credit delivery mechanism, which aimed at provision of adequate and timely supply of short-term credit to the farmers to meet their crop production requirements. The KCC instrument would allow farmers to purchase agriculture inputs such as seeds, fertilizers, pesticides and also allow them to withdraw some cash for meeting their other crop production related requirements. (Expert Committee, NABARD, 2010) Since the main objective of Kisan Credit Card system is to improve the credit accessibility of the farmers and financial inclusion, an attempt was made to analyse the impact of KisanCredit card scheme on agricultural financial inclusion in India and its relative contribution based on discriminant analysis. The findings of the study showed thatthe aggregate deposits contributed 69.26% in discriminating the study period into financial inclusion and exclusion period. Next to this factor, the introduction of KisanCredit Card scheme contributed 14.17% in determining the financial inclusion. The borrowing of commercial banks contributed only 3.15% to determine the financial inclusion.