A card for all seasons

A few years ago, I was in Kumher, Rajasthan, conducting an open house with farmers, to learn more about the extent of rural indebtedness. That day, we were discussing the Kisan Credit Card (KCC) scheme, and how easy (or difficult) it was to borrow and spend under the scheme. We asked the large group of farmers gathered if they used a KCC regularly, and if anyone in the room was carrying their passbook.

Sushant Kumar, a slim, young man in his thirties, repeatedly raised his hand with visible excitement. He was a second-generation farmer, but spent most of his time doing small, odd jobs in the village and nearby towns. His older brother managed the family farm.

Sushant was eager to show us his KCC. We gathered around him, expecting a large, passbook-style document. Much to our surprise, he whisked out his wallet and pulled out a shiny, new bank debit card and took us to the nearest ATM machine to show us how he used it.

He mentioned that he got this smart card recently and it had replaced his old passbook. This now allowed him to walk up to any ATM machine and withdraw funds easily. He said that he used it a few times a month, even for small ticket consumption purchases, such as a pack of cigarettes or a bottle of the local spirit.

A scheme which was meant to fund farming-related working capital requirements was now being used for day-to-day consumption spending. Consumer credit had reached rural India.

Sujit Sahgal is a financial markets professional with more than 27 years of experience. This story is an edited excerpt from his book ‘A Wall Street View of Rural India’.

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