Credit Guarantee Scheme for e-NWR based pledge Financing

18.12.2024

Credit Guarantee Scheme for e-NWR based pledge Financing

Why in the news?                        

           Recently, the Union Minister of Consumer Affairs, Food and Public Distribution and New & Renewable Energy launched the Credit Guarantee Scheme for e-NWR based Pledge Financing (CGS-NPF).

About Credit Guarantee Scheme for e-NWR based pledge Financing:

• It aims to provide credit facilities to small farmers to prevent them from distress selling.
• It 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.
• Coverage: Loans up to 75 lakhs for agricultural purposes and Loans up to Rs. 200 Lakhs for non-agricultural purposes.
• Eligible Institutions: All scheduled banks and 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
• Guarantee coverage: 85% for loans up to Rs. 3L and 80% for loans between 3 to 75 lakhs for small and marginal farmers/women/SC/ST/PwD and 75% for other borrowers.
• The credit guarantee schemes are expected to enhance the availability and accessibility of finances for the targeted beneficiaries, as they play an important role in economic growth.
• It will serve to increase post-harvest lending against e-NWRs and thereby, play a significant role in improving farmers’ income.

                                                                 Source: PIB

Consider the following statements regarding the Credit Guarantee Scheme for e-NWR based Pledge Financing:

1. Under this scheme Small and Marginal Farmers and Traders are eligible to borrow loans.

2. All scheduled banks and cooperative banks can provide the credit under the scheme.

Which of the statements given above is/are correct?

A.1 only

B.2 only

C.Both 1 and 2

D.Neither 1 nor 2

Answer C