The government is set to introduce a Rs 1,000 crore Credit Guarantee Fund aimed at strengthening financial support for farmers and traders. This initiative is designed to provide a safety net for banks and financial institutions, encouraging them to lend more confidently to farmers. The credit will be secured against Electronic Negotiable Warehouse Receipts (e-NWR), a system that has been in place but is underutilized due to the perceived credit risk involved.
Why This Loan Guarantee Fund is Crucial for Farmers
Farmers often face challenges in securing loans, especially against their produce stored in registered warehouses. The newly announced fund is expected to reduce the risk for lenders, ensuring that more financial aid reaches the farming community. Union Food Secretary Sanjiv Chopra revealed that the fund will address the anticipated credit risks and boost lending confidence among banks.
Massive Growth in Post-Harvest Lending Expected
Currently, post-harvest lending against e-NWR stands at a mere Rs 3,962 crore out of the total Rs 13 lakh crore in agricultural loans for FY 2023-24. However, the government’s target is to increase loans against e-NWR to a whopping Rs 1,05,000 crore in the next 10 years. This shift is expected to significantly enhance the financial support system available to farmers, particularly in the critical period after the harvest.
PM-ASHA Scheme to Continue with Rs 35,000 Crore Outlay
In another big move for farmers, the government has approved the extension of the Pradhan Mantri Annadata Aay Sanrakshan Abhiyan (PM-ASHA) with a budget allocation of Rs 35,000 crore. This scheme helps stabilize prices of essential commodities and ensures that farmers receive fair prices for their produce. The PM-ASHA initiative plays a key role in controlling price fluctuations, which benefits both farmers and consumers.
Kisan Upaj Nidhi Portal – A Key Resource for Farmers
The government is also promoting the Kisan Upaj Nidhi portal, which aims to facilitate easy access to loans and financial support for farmers. Despite its introduction, lending against e-NWR has remained low. However, with the credit guarantee fund in place, there is optimism that funding will improve significantly, leading to better post-harvest financial aid for farmers.
This series of government initiatives reflects a clear commitment to improving the financial well-being of the agricultural sector and making it easier for farmers to access essential loans. The combination of the credit guarantee fund, PM-ASHA scheme, and the Kisan Upaj Nidhi portal is expected to make a real difference in the lives of farmers across the country.
