Union Minister Pralhad Joshi Launched Credit Guarantee Scheme for e-NWR Based Financing in New Delhi

On December 16 2024, Union Minister Pralhad Joshi, Ministry of Consumer Affairs, Food and Public Distribution (MoCAF&PD) and Ministry of New & Renewable Energy (MoN&RE), launched the Credit Guarantee Scheme(CGS) for electronic-Negotiable Warehouse Receipts (e-NWR) based Pledge Financing (CGS-NPF) in New Delhi, Delhi.

• The scheme aims to provide Rs 1,000 crore corpus to support post-harvest financing for farmers.
• As per the scheme, farmers can access credit by depositing their produce stored in Warehousing Development and Regulatory Authority (WDRA) accredited warehouses, backed by e-NWRs.

Key People: Union Minister of State (MoS) BL Verma, MoCAF&PD,  Union Minister of State (MoS) Smt. Nimuben Jayantibhai Bambhaniya, MoCAF&PD, Sanjeev Chopra, Secretary, Department of Food and Public Distribution (DoF&PD), MoCAF&PD are present at the event.

Key Features of CGS-NPF:

i.Under this scheme, loans up to Rs 75 lakh  and Rs 200 lakhs (Rs 2 crore) will be provided for agricultural and non-agricultural purposes, respectively.

• It offers a guarantee fee of 0.4% per annum (p.a.) for farmers and 1% for non-farmers.

ii.All scheduled banks and all cooperative banks have been classified as eligible institutions under the scheme.

iii.Small and Marginal Farmers (SMFs), women/ Scheduled Caste (SC)/ Scheduled Tribe (ST)/ Person with Disability (PwD) farmers, small traders  from Micro, Small, and Medium Enterprises (MSMEs), Farmer Producer Organisations (FPOs) and Farmer co-operatives are eligible beneficiaries to avail the benefits of the scheme.

iv.The scheme provides guarantee coverage for: 85% of loans up to 3 lakh and 80% for loans between Rs 3 lakh to Rs 75 lakh for small and marginal farmers/women/ SC/ST/PwD  and 75% for other borrowers.

v.The scheme provides settlement of claim in two installments:

• For loans up to Rs 75 lakh: 75% of default amount will be claimed in 1st installment and remaining 25% of default amount will be claimed in 2nd installment.
• For loans above Rs 75 lakh and up to Rs 2 crore: 60% of default amount will be claimed in 1st installment and remaining 40% of default amount will be claimed in 2nd installment.

vi.The scheme will boost the post-harvest lending to Rs 5.5 lakh crore in the next 10 years.

Other Related Agricultural Credit scheme:

Kisan Credit Card (KCC):

i.It was launched in 1998, to provide easy access to agricultural inputs and cash for their production requirements.

ii.The Reserve Bank of India (RBI) had extended the KCC facility to the Animal Husbandry and Fisheries sector in 2019, for their working capital needs.

• As of 31st March 2024, 7.75 crore KCC accounts are operational.

Modified Interest Subvention Scheme (MISS):

i.It was launched in the year 2006-07 to provide short-term agri-loans at concessional rates to farmers for crop and allied activities.

ii.It offers 7% interest rate on loans up to Rs 3 lakh, with an additional interest subvention of 3% for timely repayment, reducing the overall rate to 4%.

iii.Since 2014-15, institutional credit flow to the agriculture sector has increased 3 times from Rs 8.5 lakh crore to Rs 25.48 lakh crore by 2023-24 and interest subsidy through KCC has increased 2.4 times from Rs 6,000 crore to Rs 14, 252 crore in 2023-24.

About Ministry of Consumer Affairs, Food & Public Distribution (MoCAF&PD):
Union Minister- Pralhad Joshi (Constituency- Dharwad, Karnataka)
Minister of State (MoS)- Banwari Lal (BL) Verma (Rajya Sabha- Uttar Pradesh (UP)); Nimuben Jayantibhai Bambhaniya (Constituency-Bhavnagar, Gujarat)