Government to Launch Rs 1,000 Crore Credit Guarantee Fund for Farmers Using e-NWRs

The government is set to introduce a Rs 1,000 crore credit guarantee fund to enhance lender confidence in pledge financing against electronic Negotiable Warehouse Receipts (e-NWRs) for farmers and traders using WDRA-registered warehouses. This fund aims to mitigate credit risk and improve loan uptake, providing much-needed financial support and facilitating easier access to credit for farmers.

The government will soon unveil a Rs 1,000 crore credit guarantee fund aimed at boosting lender confidence in pledge financing against electronic Negotiable Warehouse Receipts (e-NWRs) for farmers and traders utilizing WDRA-registered warehouses, Food Secretary Sanjeev Chopra announced Wednesday.

Chopra highlighted that the fund aims to address anticipated credit risks of lenders and increase the currently low pledge financing levels. He noted that, despite government efforts, pledge financing failed to gain satisfactory traction due to bankers' reluctance.

The new fund is expected to escalate loans against e-NWRs to Rs 1,05,000 crore in the next decade, up from the current Rs 3,962 crore. Additionally, the government is optimizing foodgrain storage and transportation processes to improve efficiency and reduce costs.

(With inputs from agencies.)