Government Launches Rs 1,000-Crore Credit Guarantee Scheme to Improve Post-Harvest Loan Access for Farmers

Union Minister Pralhad Joshi, launched the Credit Guarantee Scheme for e-NWR-based Pledge Financing (CGS-NPF) to support post-harvest financing for farmers. This initiative, with a corpus of Rs 1,000 crore, enables farmers to secure loans against electronic negotiable warehouse receipts (e-NWRs) after depositing their produce in Warehousing Development and Regulatory Authority (WDRA)-accredited warehouses.

At the launch event, Joshi highlighted the scheme's potential to reduce distress selling by farmers. He highlighted the importance of registering warehouses with the WDRA and urged developers to establish facilities closer to farming areas to enhance accessibility. Joshi expressed confidence that e-registration would be key to the scheme's success and outlined its role in providing a guarantee cover for loans availed by farmers and traders against e-NWRs.

The CGS-NPF aims to build trust among financial institutions, encouraging them to extend pledge financing against e-NWRs. This scheme is especially relevant for farmers and traders storing agricultural and horticultural produce in registered warehouses.

Drawing from his experiences, Joshi urged banks to adopt a more flexible approach toward loan settlements for farmers, including those involving e-NWR receipts.

Reiterating Prime Minister Narendra Modi’s commitment to farmer welfare, Joshi highlighted how the government continues to provide fertilizers like urea at the lowest global rates despite rising international prices due to ongoing conflicts.

Salient Features of CGS-NPF

Union Minister of State for Consumer Affairs, Nimuben Jayantibhai Bambhaniya, lauded the scheme as a reflection of the government’s dedication to improving farmers' lives. Similarly, Union Minister of State B.L. Verma stated that CGS-NPF addresses both credit and warehouseman risks, strengthening trust in financial institutions.

Sanjeev Chopra, Secretary of the Department of Food and Public Distribution, emphasized the urgent need for increased focus on term lending in agriculture and post-harvest financing. He expressed optimism that the scheme would catalyse growth, projecting post-harvest lending to reach Rs 5.5 lakh crore within the next decade.

Chopra also highlighted the importance of creating awareness about the scheme, rationalizing repository charges by the National e-Repository Limited (NERL) and Countrywide Commodity Repository Limited (CCRL), and accelerating warehouse registrations. The target is to register 40,000 warehouses within the next two years, ensuring a robust infrastructure for farmers.

The recently launched e-Kisan Upaj Nidhi platform was also praised for streamlining the lending process, enabling farmers to secure loans seamlessly without repeated interactions with banks.

Benefits for Marginalized Farmers and Traders

CGS-NPF prioritizes small and marginal farmers, women, Scheduled Castes (SC), Scheduled Tribes (ST), and Divyangjan (persons with disabilities), offering minimal guarantee fees. Additionally, the scheme extends its benefits to small traders, MSMEs, and Farmer Producer Organizations (FPOs).

Under the scheme:

• Loans up to Rs 75 lakh for agricultural purposes are eligible for 80–85% guarantee coverage.

• Loans up to Rs 2 crore for non-agricultural purposes receive up to 75% coverage.

• Farmers pay a reduced guarantee fee of 0.4% annually, while non-farmers are charged 1%.

The CGS-NPF scheme is expected to enhance the availability and accessibility of financing for farmers and other stakeholders, playing a pivotal role in economic growth. By addressing post-harvest challenges and reducing financial risks, the initiative aims to boost farmers’ income and contribute to the nation’s agricultural development.