Effectiveness of financial inclusion programmes for agricultural households: A case of Kisan Credit Card scheme in India

This study aims to examine the outreach of the Kisan Credit Card (KCC) scheme in India and to identify the determinants of access to KCC among the agricultural households. It employs the unit level secondary data from the large scale NSSO 77th round survey conducted in 2018–19 and other officially published data sources. Correlates of the access to KCC were identified using a probit model. The coverage of KCC scheme varied widely across the regions in India. The central and southern regions had a highest share in the operative number of KCCs at 26% each. Share in outstanding amount against KCC was at 35% and 23% respectively in the southern and northern regions. Thus, the southern region fared well both in terms of coverage and outstanding amount advanced against the KCCs. However, results from the household level data showed that despite having a fair access to institutional credit services in terms of access to a bank account, only 19.12% of agricultural households reported to have a KCC. The outreach was limited among the disadvantaged socio-economic groups and female headed households. The determinants of agricultural households’ access to KCC were age, education and gender of the household head, caste, access to extension services, landholding size, share of non-farm income, access to institutional credit facilities and major economic activity of the household. The study concludes that the outreach of the KCC scheme needs to be strengthened in case of the disadvantaged social groups and regions.