1. What is CGS-NPF?

The Credit Guarantee Scheme for e-NWR based pledge financing (CGS-NPF) is a scheme launched by the Government of India to provide guarantee against default on pledge loans availed by eligible borrowers from eligible lending institutions against electronic Negotiable Warehouse Receipts (e-NWRs) issued by registered warehouses against agricultural and horticultural commodities.

The Scheme is housed in the Credit Guarantee Scheme Trust for e-NWR based pledge financing, which is managed by National Credit Guarantee Trustee Company Limited (NCGTC), a wholly owned company of Department of Financial Services, Ministry of Finance, Government of India.

 

2. What is Pledge Finance?

"Pledge Finance", for the purpose of this scheme, means the credit facility extended by Eligible Lending Institutions (ELIS) against the e-NWRS with a valid lien.

 

3. Who are the Eligible Borrowers under the Scheme?

Eligible borrowers are Farmers, Farmers Producer Organizations (FPOs), other farmer cooperatives and Micro, Small and Medium Enterprises (MSMEs).

 

 4. Who are the Eligible Lending Institutions (ELIs) under the scheme?

ELIS are all scheduled banks and cooperative banks who have entered into an agreement with/submitted undertaking to the Trust/ Trustee for availing support under the Scheme. ELI also includes such other institutions, which the Trust/Gol may agree to include in future for support under the Scheme.

 

5. How to become an ELI under this scheme?

The interested lending institutions may register under the said scheme by submitting a signed and stamped undertaking (format available on ) along with a copy of Board Resolution. Upon successful registration, login credentials of the ELI shall be created whereafter it can apply for guarantee cover on the NCGTC's portal.

 

6. What is the maximum amount of guarantee available under the Scheme?

Maximum guarantee amount for loans given for agricultural purposes is Rs. 75 lakhs and for Non-agricultural purposes the same is Rs. 200 Lakhs.

 

7. How is the Scheme beneficial for small and marginal farmers, SC/ST/PWD and women farmers?

Under the Scheme, small and marginal farmers, SC/ST/PWD and women farmers can store their produce in warehouses registered with the Warehousing Development Regulatory Authority (WDRA) and avail loan against e-NWRs. They can sell the produce in the market at the right time to fetch remunerative prices.

Besides, an interest rate cap has also been stipulated on loans covered under the Scheme to make it further beneficial for the borrowers under the Scheme. Gol extended Interest subvention scheme to small and marginal farmers having KCC account to avail loans against e-NWRs. At present, under the interest subvention scheme, the rate of interest is 7% p.a.

 

8. Why would the ELIS extend pledge loans to small and marginal farmers and SC/ST/PWD and women farmers?

The Scheme has been made to provide confidence to the ELIS to extend loans to small and marginal farmers and SC/ST/PWD/Women farmers with a higher guarantee coverage and a lower guarantee fee as compared to other borrowers.

Details of guarantee cover and guarantee fee under the Scheme is given below:

Credit Cover under this Scheme

 

Loan Limit	Small and Marginal Farmer (SMF)/ Women/SC/ST/PwD Farmers	Other Borrowers/Beneficiaries
Up to Rs. 3 Lakhs	85% of Amount in Default
Above Rs. 3 Lakhs and up to Rs. 75 Lakhs	80% of Amount in Default	75% of Amount in Default
Above Rs. 75 Lakhs and up to Rs. 2 Crores	NA

 

Guarantee Fee under this Scheme

 

All Farmers	Non farmer Borrowers
0.40% per annum	1% per annum

 

 

9. Who will issue e-NWRs?

Warehouses registered with the WDRA can issue e-NWRs against goods stored in their warehouses through NERL & CCRL.

 

10. What is the Interest rate capping under the scheme?

The Interest Rate charged by the ELIS for loans against e-NWRS can be up to 3% over and above the Marginal Cost Based Lending Rate (MCLR) declared by ELI for a six-month tenor. As regards cooperative banks where MCLR is not applicable, the rate of interest is capped at 1% below the average lending rate to the targeted segment.

 

11. When is the Guarantee Fee Payable?

Guarantee Fee shall be paid to the Trust by the ELI latest by the 7th day of each month for the loan amount outstanding on the closing day of the previous month.

 

12. I am an ELI registered with NCGTC under this Scheme. Some recovery has been made subsequent to settlement of 1st claim. Please advise how much of this amount has to be passed to the Trust?

In case of any recovery made by the ELI from the borrower subsequent to release of 1 st /2 nd claim by the Trust, proportionate share of Trust in such recoveries (after adjustment of the legal costs incurred by ELI for recovery of the amount) shall be passed on by ELI to the Trust and details shall be entered in the portal at the appropriate place. Such amounts shall be passed on to the Trust on Quarterly basis within 30 days of the end of the Quarter in which the recoveries were made.

If any amount due to the Trust remains unpaid beyond the stipulated period, penal interest shall be payable to the Trust by the ELI at the rate of 10% p.a. or such rate as may be specified by the Gol from time to time for the period of delay.

 

13. I'm a Farmer/FPO/Trader/MSME and want to store my farm produce in a registered warehouse, but do not have any additional collateral security to offer for pledge loan. Am I an eligible borrower under this Scheme?

Yes, Farmer/FPO/Trader/MSME are eligible borrowers for under this Scheme. They may avail pledge loan against e-NWR for goods/produce stored in a registered warehouses without submitting additional collateral.