‘Govt to launch Rs 1,000 cr credit guarantee fund to boost pledge financing for farmers’

new delhi: The government on Wednesday said it will soon launch a Rs 1,000 crore credit guarantee fund to enhance lender confidence in pledge financing against electronic Negotiable Warehouse Receipts for farmers and traders using WDRA-registered warehouses.

Food Secretary Sanjeev Chopra told reporters here that the fund with a corpus of Rs 1,000 crore will address the anticipated credit risk of lenders.

“A credit guarantee scheme has been approved recently and will be launched shortly,” Chopra announced, highlighting the achievements in 100 days of the Modi 3.0 government.

The pledge financing against electronic Negotiable Warehouse Receipts (e-NWRs) was not gaining traction to a satisfactory level despite the government efforts to make it seamless with the recent introduction of the Kisan Upaj Nidhi portal, he said.

The Kisan Upaj Nidhi is a government initiative aimed at supporting farmers by providing financial assistance and facilitating easier access to credit. The secretary said the pledge post-harvest financing was only Rs 3,962 crore in the total Rs 13 lakh crore credit in 2023-24. The lower pledge financing was due to “reluctance on the part of bankers anticipating a credit risk.”

The new credit guarantee fund aims to address the credit risk and ensure a pick-up in loans against pledge of eNWRs to Rs 1,05,000 crore in the next 10 years from the current level.

The secretary further said his department has used the PM Gati Shakti to optimise the routes taken by vehicles for carrying PDS foodgrains from FCI godowns to state godowns to fair price shops, thereby saving Rs 112 crore.