Credit Guarantee Scheme for e-NWR based Pledge Financing

The Union Minister of Consumer Affairs, Food and Public Distribution recently launched the Credit Guarantee Scheme for e-NWR based Pledge Financing (CGS-NPF).

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Credit Guarantee Scheme for e-NWR based Pledge Financing

Aim: Providing credit facilities to small farmers & preventing 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 Rs. 75 lakhs for agricultural purpose and Loans up to Rs. 200 Lakhs for nonagricultural purpose.
Risks Covered:
- Credit risk: Default on repayment.
- Warehouseman risk: Failure of warehouses to deliver stored goods.

Eligible Institutions and Borrowers

Institutions: All scheduled and cooperative banks.
Borrowers:
- Small and marginal farmers, women, SC/ST/PwD farmers.
- MSMEs, Farmer Producer Organizations (FPOs), and traders.

Electronic Negotiable Warehouse Receipt (e-NWR)

It is a digital receipt that allows the transfer of ownership of a commodity stored in a warehouse without having to physically deliver it. e-NWRs can be used for trading, settlement, financing and can be used as collateral for loans.
Presently, e-NWR lending is only Rs 4000 Cr against the potential of Rs 5.5 lakh crore.

Warehousing Development and Regulatory Authority (WDRA)

It is a Statutory body WDRA constituted in 2010 under the Warehousing (Development and Regulation) Act, of 2007.
Nodal Ministry: Department of Food and Public Distribution, Ministry of Consumer Affairs, Food and Public Distribution.
Functions:
- Developing and regulating warehouses
- Negotiating warehouse receipts
- Promoting the growth of the warehousing business