Credit Guarantee Scheme for e-NWR based Pledge Financing (CGS-NPF)

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.

• 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