Good News For Farmers! Govt approves Interest Subvention Scheme 2026 for KCC Loans, Farmers to get subsidy

The Government of India has decided to continue the Modified Interest Subvention Scheme (MISS) for the year 2025–26. This scheme helps farmers get cheap loans by giving interest support (subvention) to banks. In this article, we will understand all details about this scheme.

Loan limit and interest rate for farmers

• Farmers can get short-term crop loans and short-term loans for allied activities (like animal husbandry, dairy, fisheries, beekeeping, etc.)
• These loans are given through the Kisan Credit Card (KCC).
• Maximum loan limit: ₹3 lakh per year.
• Interest rate charged to farmers: 7% per year.
• The government will give 1.5% interest subvention to banks to support this.

👉 This benefit applies to:

• Public Sector Banks
• Private Banks (only rural & semi-urban branches)
• Small Finance Banks
• Computerised PACS linked with Scheduled Commercial Banks

Extra benefit for farmers who repay on time

• Farmers who repay their loan on time will get an additional 3% interest benefit.
• This means their effective interest rate becomes only 4% per year (7% – 3%).
• This benefit is valid for up to one year from the loan date.
• If a farmer repays after one year, this benefit will not apply.

Loan limit for allied activities (important point)

• Total interest benefit is available up to ₹3 lakh per year.
• But for farmers only doing allied activities (dairy, fisheries, animal husbandry, beekeeping, etc.), the maximum limit is ₹2 lakh.
• Crop loans get first priority for interest benefits.
• If any amount remains, it can be used for allied activities (within the limit).

👉 Example (simple):

• Crop loan: ₹2 lakh
• Allied activities loan: ₹1 lakh
• Total eligible = ₹3 lakh

Benefit for storing crops in warehouses

• To stop farmers from selling crops at very low prices after harvest, the government is giving extra support.
• Small and marginal farmers can get interest benefit for up to 6 more months after harvest.
• This applies when crops are stored in WDRA-approved warehouses and loans are taken against warehouse receipts.
• Interest rate remains the same as crop loan.

Relief in case of natural calamities

• If farmers are affected by natural disasters (floods, droughts, etc.) and their loans are restructured:
  • Banks will get interest subvention for the first year on the restructured loan.
  • From the second year onwards, normal interest will apply.

Extra relief in severe natural calamities

• In cases of severe natural disasters:
  • Interest subvention will be given for up to 3 years, or
  • For the entire loan period, subject to a maximum of 5 years.
• Farmers will also get 3% prompt repayment incentive in these cases.
• This special relief will be approved only after recommendations by:
  • Inter-Ministerial Central Team (IMCT)
  • Sub-Committee of National Executive Committee (SC-NEC)
  • Final decision by a High-Level Committee (HLC)

In Simple Words

• Farmers can get loans up to ₹3 lakh at 7% interest.
• If they repay on time, interest drops to 4%.
• Extra support is available for allied farming activities.
• Small farmers get help to store crops after harvest.
• Special relief is given during natural disasters.