Centre Launches ₹1,000 Crore Credit Guarantee Scheme for Post-Harvest Loans

On December 16, the government launched a loan facility under a credit guarantee of ₹1,000 crore called CGS-NPF to help farmers get post-harvest loans. This facility has a guarantee cover for loans against e-NWRs and contributes to discouraging distress sales and enhancing institutions’ confidence in financing farmers. If you would like to know more about the main advantages of the agriculture loan scheme, read on.

Read More: Mukhyamantri Kisan Kalyan Yojana

Overview

Category	Details
Total Corpus	₹1,000 Crores.
Loan Coverage	Up to ₹75 lakhs for agricultural purposes and Up to ₹200 lakhs for non-agricultural purposes.
Eligible Institutions	All scheduled banks and cooperative banks.
Eligible Borrowers	Small and Marginal Farmers (SMF), Women, SC/ST, PwD Farmers and Other Farmers, MSMEs, Traders, FPOs, and Farmer Cooperatives.
Risks Covered	Credit risk and warehouseman risk
Guarantee Fee	0.4% per annum for farmers and 1% per annum for non-farmers.
Guarantee Coverage	85% for loans up to ₹3 lakhs, 80% for loans between ₹3 lakhs and ₹75 lakhs (SMF/Women/SC/ST/PwD) and 75% for other borrowers.

Settlement For Claims:-

Loan Amount	1st Installment (% of Default Amount)	2nd Installment (% of Default Amount)
Up to ₹75 lakhs	75%	25%
Above ₹75 lakhs and up to ₹2 crore	60%	40%

What Is The ₹1,000 Crore Credit Guarantee Scheme?

This Sarkari scheme plans to ensure financial stability for farmers for post-harvest loans against e-NWRs. To understand it better, read the following points carefully:-

• Objective: To reduce distress selling by farmers and to promote pledge finance for agricultural and horticultural produce contained in existing registered warehouses.

• Coverage: Provides a guarantee cover for loans drawn by farmers, traders, and Farmer Producer Organisations (FPOs).

Who Can Benefit From The Scheme?

ESDM focuses on Small and marginal farmers, Women, SC/ST farmers and Divyangjan (PwD).

• Small and Marginal Farmers: Of the loans particularly up to ₹75 lakhs, 80–85% will be covered.

• MSMEs, FPOs, and Traders: Whereas loans up to ₹ 200 lakhs will be 75% covered.

Read More: Sub Mission On Agricultural Mechanisation

How Does The Scheme Support Post-Harvest Lending?

The government scheme raises financing against e-NWRs and encourages agricultural storage in the registered warehouse.

Loan Guarantee: Gives confidence to the bankers for providing Pledge finance to the farmers.

Lending Target: The technique aims to at least double and reach ₹5.5 lakh crore in post-harvest lending in the next 10 yrs.

What Are The Key Steps For Warehouse Development?

This Sarkari Yojana also focuses on the development and enhancement of warehousing facilities. To understand it better, read the following points carefully:-

• Warehouse Registration: It aims to register 40,000 warehouses in the course of the next one to two years.

• Proximity to Farms: Favours construction of warehouses closer to farmlands to easily access.

• Reduced Repository Charges: propose to make some changes from repositories like NERL and CCRL less costly.

Read More: Digital Agriculture Mission

Why Is This Scheme Significant for Farmers?

This government scheme prevents farmers from being forced to sell their produce and also enhances their cash flow status.

• Increased Income: Enhances timely price realisation by stocking produce in stores called warehouses.

• Special Focus Groups: Offers small and marginal farmers, women and disadvantaged groups at lower guarantee fees.

Add subheadings for parts on how to apply for this scheme, what is the eligibility criteria, and what documents are required.

Conclusion

The Credit Guarantee schemes worth ₹ 1000 crore especially for the post-harvest credit loans to farmers are one of the most welcoming changes that can bring about a financial power shift in the hands of farmers thereby helping in curbing distress selling. This signal and call intends to provide better loans for food processing units as well as strengthen the storage facilities hence holding a better tomorrow for the Indian agricultural sector.

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