Why in News?
The Union Minister recently launched the Credit Guarantee Scheme for e-NWR based Pledge Financing (CGS-NPF).
- CGS-NPF – It provides a corpus of Rs 1,000-crore for post-harvest finance availed by farmers against electronic negotiable warehouse receipts (e-NWRs).
- Prerequisite – It can availed after depositing commodities in Warehousing Development and Regulatory Authority (WDRA) accredited warehouses.
e-NWR is an effective tool for promoting pledge financing organized by the Warehousing Development and Regulatory Authority (WDRA) under the Department of Food and Public Distribution (DFPD).
- Objectives – To minimise distress selling by farmers.
- Launched by – Ministry of Consumer Affairs, Food & Public Distribution.
- Eligible Institutions – All scheduled banks & all cooperative banks.
- Eligible Borrowers – Small and Marginal Farmer (SMF)/ Women/SC/ST/PwD Farmers, other farmers, MSMEs, Traders, FPOs and Farmer cooperatives.
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Coverage
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Agricultural purpose
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Loans up to Rs. 75 lakhs, 80-85% coverage.
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Non-agricultural purpose
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Loans up to Rs. 200 lakhs, coverage up to 75%.
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- Risks covered - Credit and warehouseman risk
- Significance – It instill the confidence in bankers to encourage the farmers and traders to extend pledge finance against e-NWRs.
- It will boost post-harvest lending to Rs 5.5 lakh crore in the next 10 years
Currently, e-NWR lending is a mere Rs 4000 CR against the potential of Rs 5.5 lakh crore.
Reference
PIB| CGS-NPF
