Context:
Credit Guarantee Scheme of ₹1,000 crores for pledge financing against e-NWRs(electronic-Negotiable Warehouse Receipts) intends to enhance the adoption of electronic warehouse receipts in agricultural markets.
e KUN Program: e Kisan Upaj Nidhi (e KUN) program gives low interest loans through e NWRs to deter farmers from distress selling under the Digital India Mission.
Role of NeRL with Expansion of Warehouses
- The NeRL Effect
- The National e Repository Limited expects more warehouses to register under WDRA with 88% market share.
- Warehouses Registration
- There are around 1 lakh warehouses in India, of which 40,000 are public.
- 5,000 warehouses were registered by WDRA but only 2,500 of them are connected to e NWR issuance through NeRL or its competitor, Countrywide Commodity Repository.
RBI Support & Financing Ramp Up
- PSL Limits
- RBI has increased the PSL limits for e NWRs from ₹50 lakh to ₹75 lakh.
- NeRL has requested a further increase of ₹2 crore for Farmer Producer Organisations (FPOs) and ₹4 crore for traders.
- Loan Facilitation & Growth
- Loans worth ₹10,000 crore were facilitated by banks via e NWRs.
- Low NPAs suggest secure lending under the system.
- Expected lending through NeRL e-NWRs is projected to increase by 33% this fiscal to ₹4,000 crore (₹3,000 crore last year).
- Getaways
- The government envisages that the lending via e NWR pledge finance will touch ₹1 lakh crore within 10 years.
Expansion and Market Share
- Geographical Presence
- NeRL is strongest in Gujarat, Rajasthan, MP, Maharashtra, Tamil Nadu, AP, and Telengana with plans for further expansion.
- Shareholding Changes
- NCDEX has reduced its shareholding in NeRL to 51% for regulatory reasons; the remainder includes NABARD, ICICI, and SBI.
- Revenue and Transaction Trends
- 40% of NeRL’s revenue comes from NCDEX Exchange Depositors, with just 1.5 lakh tonnes of handling.
- From non NCDEX clients, 8.5 lakh tonnes were handled in the first 9 months of FY25.
Expectedly, the credit guarantee scheme and e KUN program worth ₹1,000 crore will change warehouse based financing, lessening the burden of traditional loans. While NeRL’s growth, increased PSL limits, and low NPAs constitute its growth potential. The lending ecosystem based on e NWR, therefore, is expected to grow enormously within the next decade, giving a hand to farmers, traders, and the financial infrastructure.
