The Union Government on December 16 launched the ‘Credit Guarantee Scheme for e-NWR-Based Pledge Financing.’
Under this scheme, farmers will now be able to get a loan through their produce.
Key features of scheme
This scheme provides a corpus of Rs 1,000-crore for post-harvest finance availed by farmers against electronic negotiable warehouse receipts (e-NWRs) after depositing commodities in Warehousing Development and Regulatory Authority (WDRA) accredited warehouses.
After submitting their produce to warehouses registered with WDRA, they will be issued an e-NWR. This receipt can be used as a guarantee against default to obtain low-interest loans from banks and other lending institutes.
Farmers, farmers’ producer organisations, farm cooperatives, and MSMEs will be eligible under this scheme.
This scheme majorly focuses on Small and Marginal Farmers, Women, SC, ST and Divyangjan (PwD) farmers with a minimal guarantee fee.
Besides, small traders (MSMEs), FPOs are also benefited under this scheme.
Loans extended to small and marginal farmers up to Rs. 75 Lakhs will have coverage of 80 to 85% and loans extended to MSMEs/FPO ‘s /traders up to Rs. 200 Lakhs will have coverage upto 75% under the scheme.
This scheme will prevent post-harvest distress sale that forces many farmers to sell their produce at below market price. This will also reduce risks for banks and eligible lending institutes by providing a secure portfolio.
