Meerut, India – Two years ago, the paint on Mohammad Mohsin’s house started to peel. Now, the faded green, white, and yellow walls bear marks from last year’s monsoon rains.
To get from the kitchen to a courtyard cluttered with buffalo dung, a rusty scooter, and an old cot, one must bend low due to a narrow passage. This home is located in Meerut district, about 100 kilometers from New Delhi.
Mohsin, resting on an iron shovel, mentioned earlier this year that he would paint the house when it was time for his sister Aman’s wedding. However, the wedding date passed without any ceremony taking place.
In 2023, Mohsin took out a loan of about $1,440 through the Kisan Credit Card (KCC) scheme offered by the Indian government. The term "Kisan" translates to "farmer" in Hindi. The KCC was introduced in 1998 to modernize rural lending, providing farmers with easy, short-term loans at low interest rates for agricultural needs, aiming to replace exploitative private lenders.
The KCC operates like a revolving credit line, allowing farmers to borrow money at the beginning of a crop cycle and repay it after harvest. With an annual interest rate of 4 percent, it’s a vital financial resource for many farmers.
However, over the years, farmers have increasingly diverted KCC loans from their intended agricultural purposes. In Mohsin’s case, the loan was meant for his sister’s dowry, as Aman’s future in-laws had demanded gifts that included a car and a large sum of money.
When he got the KCC loan from a local bank, Mohsin withdrew cash from an ATM and quickly made a down payment for a car.
By early 2025, the marriage plans derailed again due to escalating dowry demands. Meanwhile, Mohsin found himself deep in debt, unable to invest in his fields or buy seeds.
His car, bought for the wedding, was now a new burden. After missing a few payments, he faced increased interest rates on his loan, which had risen to 7 percent due to late repayments.
While Aman, now 22, has completed a seven-year Islamic theology course at a prominent seminary, her family continues the search for a suitable groom. “I will wait for the right family,” she stated.
However, the dowry system remains strong, with many families negotiating over wedding gifts. Tragically, dowry-related deaths are a grim reality in India. In 2024, there was a dowry-related death recorded every 30 hours, highlighting the danger many women face.
Aman’s mother, Amina Begum, expressed the harsh truth when she said that in their community, “no dowry means no groom.” Once a groom is found, Mohsin may again need to rely on the KCC scheme for more funds.
However, he can’t apply for a new KCC loan until the current one is fully repaid. Many farmers resort to middlemen who help them renew loans for a steep daily interest rate. This only strengthens their cycle of debt.
Unfortunately, India’s farmers receive little state aid for emergencies like medical bills or weddings, often pushing them toward loans meant for farming. Reports indicate that India’s public healthcare expenditure is among the lowest globally.
As a result, farmers are using KCC loans to supplement essential expenses rather than for agricultural productivity. Many are trapped in what a farmers’ leader calls a "development debt trap," leading to a cycle of borrowing just to survive.
Research shows that only a small portion of KCC loans is actually used for agriculture, with many farmers diverting funds for household needs, medical expenses, and weddings.
Mohsin and others in his village fear the consequences of unpaid debts. "The system doesn’t break down your door, it breaks your dignity," he noted. In small villages, being labeled a defaulter can lead to deep shame and social stigma.
To avoid embarrassment, many farmers, including Mohsin, resort to middlemen to help manage their loan repayments, only to trap them further in debt.
Experts indicate that while schemes like KCC have made credit more accessible, they have also led to deeper indebtedness. As of 2024, KCC has disbursed over $120 billion to farmers, but the reality often reveals a different story, as many loans are renewed without actual repayment.
Farmers facing overwhelming debts have begun taking desperate actions, including suicide. In 2023 alone, Maharashtra, India’s wealthiest state, reported the highest number of farmer suicides, highlighting the severity of the crisis afflicting Indian agriculture.
Critics argue that without significant policy reforms focused on better healthcare, education, and profitable farming, the issues will persist. Experts stress that the agricultural credit system must be fundamentally revised to align with the reality of farming and the broader needs of rural communities.
“Cash alone cannot solve rural distress,” said development economist Jayati Ghosh, emphasizing the need for a comprehensive approach to address systemic issues facing farmers.
In the village, Mohsin’s buffalo is a symbol of status, yet it doesn’t help with the growing debts. He’s unable to renew his loan, and each harvest seems to bring more financial woes. Looking out at his struggling sugarcane fields, he wonders, “Does farming even have a future?”
