Factors Influencing Usage of RuPay Kisan Credit Card by Farmers : An Assessment

The Kisan Credit Card (KCC) is the single largest credit product for crop cultivation in the country. The scheme was introduced in 1998 to address the financial requirements of farmers at various stages of farming. Over the period, the scheme has been modified with more add-on features to cater to the comprehensive credit needs of farmers in a hassle-free and cost-effective manner. In 2012, the scheme was modified to facilitate KCC holders by issuing debit cards, which could be used by farmers anytime and anywhere to access the KCC loan without visiting bank branches. Despite issuing such debit cards, the usage of cards among the farmers remains poor, and most of them used it a single time in a year. The present paper attempts to assess the factors associated with the usage of the Rupay Kisan Credit Card (RKCC) among the farmers, based on a survey of 895 farmers spread across 12 districts in six states. The paper used a binary logistical regression model to assess the factors influencing the usage of RKCC. The paper finds that being a small and medium farmer having multiple sources of income, and being a semi-matured client are all positively associated with decision of using RKCC. In contrast, being male farmer with a marginal land holding and being a mature client are negatively associated with using RKCC. The paper recommends: (i) building awareness amongst farmers by utilising community-based organisations, media platforms, etc; (ii) creation of infrastructure in rural and semi-urban areas so as to facilitate debit card transactions; and, (iii) utilisation of the services of business correspondent agents to offer doorstep withdrawal services for RKCC.