End-to-End
Digitalisation of KCC
Lending
Mission
Enabling frictionless finance for 120 million farmers in India by improving credit access through the Kisan Credit Card Scheme: the predominant mode of financing for farmers in India.
Reduced Turnaround Time
(TAT)
Paperless
process
Reduced
Costs
The Kisan Credit Card (KCC), a government initiative aimed at providing credit to farmers, had long been encumbered by a lengthy application process, multiple KYC requirements, and high costs.
To alleviate these issues, we undertook a pilot project to digitalise the KCC lending process. We started by understanding the pain points of the process.
Key Issues Identified From
Field Study
Largely Paper-based Process
High Turnaround Time (TAT) of upto 2-4 weeks
Upto 5% additional costs (for a loan of 1 lakh) towards documentation
The KCC Pilot Project Process
A farmer applies for a KCC loan through an assisted or self-service mode
The farmer identity is verified using Aadhaar e-KYC through biometric or an OTP-based authentication
The bank fetches land record and ownership details of the farmer from the State Government Land Record Database using an API integration
- a) Loan Eligibility is calculated using Business Rule Engine (BRE)
- b) Loan amount is derived by automating the scale of finance
- c) Loan documents are signed using Aadhaar eSign
- d) Loan account is opened and instant disbursal of the amount
The end-to-end KCC Digitalisation Project aims at making a transformative impact on the rural credit delivery system. It reduces the loan disbursement time by adopting a straight through digital process that leverages India’s Digital Public Infrastructure and making the process faster and more efficient.
The pilot was successfully launched in September 2022 in select districts in Madhya Pradesh and Tamil Nadu, with Union Bank of India and Federal Bank respectively. Based on insights gained from the pilot, we are enabling scale, and extending the process to KCC lending in several other states.
Potential Impact
- Paperless process
- Elimination of additional costs borne by farmer
- Reduction in application TAT from 3-4 weeks to less than 1 hour
- Widening and deepening of agricredit for small and marginal farmers