MISS provides a 1.5% interest subvention to lending institutions plus an additional 3% prompt repayment incentive to farmers, making short-term crop loans available at an effective 4% p.a.
Modified Interest Subvention Scheme: 4% Short-Term Crop Credit
The Modified Interest Subvention Scheme (MISS) ensures that Indian farmers have access to timely, formal, and affordable short-term agricultural credit to finance seasonal input purchases (seeds, fertilizers, diesel, and labor).
How the 4% Effective Interest Rate Works: 1. Standard commercial lending rate on short-term crop loans up to ₹3,00,000 is capped at 7.0% per annum. 2. The Government of India provides a 1.5% interest subvention directly to Public Sector Banks, Regional Rural Banks (RRBs), and Cooperative Banks. 3. For farmers who repay their loans on or before the due date, an additional 3.0% Prompt Repayment Incentive (PRI) is credited. 4. Net Effective Interest Rate: 7% - 3% = 4.0% per annum.
Coverage: - Short-term crop production credit up to ₹3.00 Lakhs through Kisan Credit Card (KCC). - Extended to Animal Husbandry, Dairy, and Fisheries farmers up to ₹2.00 Lakhs.
