Govt launches CGS-NPF scheme to help farmer access post harvest loan
Government Scheme
4 min read
The government of India has launched a credit guarantee scheme to enable the farmers to acces credit from eligible financial institutions on harvested crops deposited in registered warehouses. The Credit Guarantee Scheme for e-NWR-based Pledge Financing (CGS-NPF) was launched by the central government in New Delhi on 6 December 2024.
The government hopes that the launch of the scheme will boost the post-harvest lending to farmers/trades to Rs 5.5 lakh crore in the next 10 years.
Who launched the CGS-NPF Scheme?
The Credit Guarantee Scheme for e-NWR-based Pledge Financing (CGS-NPF) was launched by the Union Minister for Consumer Affairs, Food and Public Distribution and New & Renewable Energy, Pralhad Joshi, in New Delhi.
Corpus of the CGS-NPF Scheme
The corpus of the CGS-NPF Scheme is Rs 1000 crore.
Which Ministry will manage the CGS-NPF fund?
The CGS-NPF fund will be managed by the Union Ministry of Consumer Affairs, Food and Public Distribution.
Feature of the Scheme
- The farmers/traders can avail loans from eligible financial institutions against the electronic negotiable warehouse receipts issued by Warehousing Development and Regulatory Authority (WDRA) accredited warehouses.
- The electronic negotiable warehouse receipts will be issued against the agricultural commodities deposited by farmers/traders with Warehouses.
- The government will counter-guarantee the loan extended by the financial institutions against such electronic negotiable warehouse receipts.
- If the farmers/traders fail to repay the loan, then the government will reimburse the financial institution under the CGS-NPF Scheme.
- This will encourage the financial institutions to extend loans to farmers/traders as their loans are being counter-guaranteed by the government.
Counter Guarantee of Loans
- Agricultural loans up to Rs 75 lakhs and loans up to Rs. 2 crores for nonagricultural purposes are covered.
- The government will reimburse the financial institution 85% of the loan amount for loans up to Rs 3 lakhs.
- For loans of Rs 3 -75 lakhs, the reimbursement amount is 80 % of the loan amount for small and marginal farmers/women/scheduled caste/scheduled tribes/persons with disabilities farmers.
- For the other borrowers, the counter-guarantee for Rs 3-Rs 75 lakh loan is 75 % of the loan amount.
Eligible Farmers/Traders
- Small and Marginal farmers/Women/Scheduled Caste/Schedule Tribes/Person with Disabilities farmers and other category farmers.
- Micro Small and Medium Enterprises(MSME), Farmer Producer Organisation, Farmer Cooperatives and Traders.
Eligible financial institutions
- All scheduled banks and all cooperative banks.
