The Ministry of Consumer Affairs, Food & Public Distribution has introduced the Credit Guarantee Scheme for e-NWR Based Pledge Financing (CGS-NPF) to support farmers in accessing loans against electronic Negotiable Warehouse Receipts (e-NWRs).

About e-NWRs

Definition: e-NWRs are digital versions of traditional warehouse receipts governed by the Warehousing (Development and Regulation) Act of 2007.

Purpose: Facilitate the transfer or sale of goods deposited in WDRA-accredited warehouses through endorsements.

Implementation: Since 2019, the Warehousing Development and Regulatory Authority (WDRA) has mandated the issuance of warehouse receipts in electronic form.

Key Features of the CGS-NPF Scheme

Nodal Ministry: Ministry of Consumer Affairs, Food & Public Distribution.

Corpus: Rs 1,000 crore for post-harvest finance.

Loan Coverage:

• Up to Rs 75 lakhs for agricultural purposes.
• Up to Rs 200 lakhs for non-agricultural purposes.

Eligible Institutions: All scheduled banks and cooperative banks.

Eligible Borrowers: Small and marginal farmers, women, SC/ST/PwD farmers, MSMEs, traders, Farmer Producer Organisations (FPOs), and farmer cooperatives.

Risks Covered: Credit risk and warehouseman risk.

Guarantee Coverage:

• 85% for loans up to Rs 3 lakh for small and marginal farmers/women/SC/ST/PwD.
• 80% for loans between Rs 3 lakh to Rs 75 lakh for small and marginal farmers/women/SC/ST/PwD.
• 75% for loans to other borrowers.

Significance of the Scheme

Financial Inclusion for Farmers: Provides small and marginal farmers with easier access to post-harvest credit by leveraging e-NWRs.

Empowering Rural Economy: Enables MSMEs, FPOs, and cooperatives to access loans for agricultural and non-agricultural purposes.

Reduction in Post-Harvest Losses: Encourages farmers to store their produce in WDRA-accredited warehouses, minimizing wastage and distress sales.

Enhanced Credit Risk Management: Credit guarantees offer security to financial institutions, incentivizing lending to vulnerable groups.

About WDRA

• It is a statutory body established under Warehousing (Development & Regulation) Act, 2007.
• Objective: It aims to introduce the NWR system, allowing farmers to store their produce in nearby, and scientifically managed warehouses.
• Key Functions: Regulating warehouses, promoting scientific storage, boosting supply chain efficiency, etc.