209
3.
KCC Outreach Deserves to be Expanded
The estimated number of KCCs in operation (4.33 crore) against nearly
14.79 crore rural households and 8.935 crore operational land holdings
would clearly show that a large number of farmers have not been
covered by KCC. Farmers who did not have a KCC account have stated
that reasons such as unwillingness of the banks to consider oral lease,
unwillingness to consider small loans, etc., are also some important
reasons.
4.
KCC and Type of Farmers
Access to KCC seems to be easier for the big farmers than small farmers.
The number of small farmers financed under KCC is much less than the
number of small farmers eligible for credit.
It is evident that the owner cultivator is preferred for the issue of KCC
than farmers with oral lease and other forms of tenancy. In the mean
time, the RBI has issued guidelines on General Credit Card (GCC)
for financial inclusion. As GCC is more easily accessible, it is worth
considering if tenant farmers can be brought under GCC.
5.
Collateral and KCC
Banks are not allowed to take any security for loans up to
`
50,000. For
the rest banks take surety or mortgage. It should be possible for the
state governments to speed up computerisation of land records and
mortgage becomes easy.
6.
Sanction Process, Scale-of Finance (SOF) and KYC
Various studies and field visits by Baskaran Team suggest that small and
marginal farmers who cultivate crops which have a lower SOF find it
difficult to get sanction under KCC. On RBI’s institutions, general credit
cards (GCC) have to be issued as part of financial inclusion, credit by
merely giving proof of residence and without any commitment of end
use at least up to
`
25,000 should be available for marginal farmers.
7.
Product Design
KCC is not a card
per se
. It is only a pass book with an ID and all
financing details. Steps must be taken to convert it into a regular credit
card or a biometric card.
