Credit Guarantee Scheme for e-NWRs

February 19, 2025

The Government of India has announced measures to improve credit access for farmers. A ₹1,000 crore allocation for the Credit Guarantee Scheme for electronic-Negotiable Warehouse Receipts (e-NWRs) aims to transform agricultural financing. This initiative is part of the Digital India Mission and includes the e-Kisan Upaj Nidhi (e-KUN) programme. This programme provides farmers with low-interest loans through e-NWRs, protecting them from distress sales.

What are Electronic Negotiable Warehouse Receipts?

e-NWRs are digital documents that represent ownership of goods stored in warehouses.
They facilitate easier access to credit for farmers.
By using e-NWRs, farmers can pledge their stored goods to secure loans.
This reduces the need for physical documentation and improves efficiency in the financing process.

Role of NeRL in e-NWR Issuance

The National e-Repository Limited (NeRL) is the largest issuer of e-NWRs in India, holding an 88% market share.
NeRL has facilitated loans worth ₹10,000 crore against e-NWRs.
The government expects more warehouses to register with the Warehouse Development and Regulatory Authority (WDRA) for e-NWR issuance.
Currently, only about 5,000 warehouses are registered.

Credit Guarantee Scheme Features

The Credit Guarantee Scheme for e-NWR based pledge financing offers comprehensive benefits.
It covers loans up to ₹75 lakh for agricultural purposes and ₹2 crore for farmer producer organisations.
The scheme aims to support small and marginal farmers, women, and other disadvantaged groups.
The guarantee fee is minimal, making it accessible to a broader range of borrowers.

Impact on Agricultural Financing

The scheme is designed to enhance post-harvest lending through e-NWRs.
It is expected to increase lending to ₹1 lakh crore in the next decade.
The Reserve Bank of India (RBI) has also raised the Priority Sector Lending limit for e-NWRs, further facilitating access to credit for agricultural stakeholders.

Future Prospects and Challenges

The agricultural sector in India has about one lakh warehouses, with 40,000 being public. The government’s initiatives are expected to increase the registration of warehouses and the adoption of e-NWRs. However, challenges remain in reaching all farmers, especially in rural areas. Continuous investment in technology and awareness is essential for success.

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