Credit Guarantee Scheme For E-NWR Based Pledge Financing Launched

The Credit Guarantee Scheme for E-NWR Based Pledge Financing (CGS-NPF) aims to support farmers in availing loans against electronic Negotiable Warehouse Receipts (e-NWRs) after depositing their commodities in Warehousing Development and Regulatory Authority (WDRA) accredited warehouses.

About e-NWRs (Electronic Negotiable Warehouse Receipts)

1. Definition: e-NWR is the digital version of the traditional warehouse receipt, governed by the Warehousing (Development and Regulation) Act, 2007.
2. Function: It allows goods deposited in a registered warehouse to be transferred or sold through endorsement.
3. Mandatory Shift: Since 2019, the WDRA has mandated the issuance of NWRs in electronic form.

About WDRA (Warehousing Development and Regulatory Authority)

1. About: A statutory body established under the Warehousing (Development & Regulation) Act, 2007.
2. Objective: To introduce the NWR system, allowing farmers to store their produce in nearby scientifically managed warehouses.
3. Key Functions:
   1. Regulating warehouses.
   2. Promoting scientific storage.
   3. Boosting supply chain efficiency.
4. Headquarters: New Delhi.

Key Features of the CGS-NPF Scheme

1. Ministry: Ministry of Consumer Affairs, Food & Public Distribution
2. Total Corpus: Rs. 1,000 crore allocated for post-harvest finance.
3. Loan Coverage:
   1. Loans up to Rs. 75 lakh for agricultural purposes.
   2. Loans up to Rs. 200 lakh for non-agricultural purposes.
4. Eligible Institutions: All scheduled banks and cooperative banks.
5. Eligible Borrowers:
   1. Small and marginal farmers
   2. Women farmers
   3. SC/ST/PwD farmers
   4. MSMEs
   5. Traders
   6. Farmer Producer Organizations (FPOs)
   7. Farmer cooperatives
6. Risks Covered: Credit and warehouseman risks.
7. Guarantee Coverage:
   1. 85% for loans up to Rs. 3 lakh for small and marginal farmers, women, SC/ST/PwD farmers.
   2. 80% for loans between Rs. 3 lakh to Rs. 75 lakh for the above category.
   3. 75% for other borrowers.

Significance of the Scheme

1. Minimizing Distress Selling: Ensures the availability and accessibility of finances for targeted beneficiaries, helping farmers avoid distress selling of their produce.
2. Instilling Confidence in Bankers: Addresses defaults arising from both credit and warehouseman risks, thereby boosting confidence among lenders.

This scheme is a significant step toward supporting farmers and other eligible stakeholders by improving access to finance while minimizing risks associated with agricultural and warehouse operations.

 

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