MoU signed with SBI to facilitate farmers get loans at low interest rates
Jan 17, 2023
New Delhi [India], January 17 : To facilitate farmers in getting loans at low-interest rates, Warehousing Development Regulatory Authority (WDRA) has signed a Memorandum of Understanding (MoU) with the State Bank of India (SBI).
According to a Ministry of Consumer Affairs, Food and Public Distribution release, the MoU was signed with the intent of promoting awareness about the new loan product called Produce Marketing Loan to exclusively fund against e-NWRs (electronic Negotiable Warehouse Receipt) with features such as Nil processing fee, No Additional collateral and attractive interest rates.
It is envisaged that the product will have far-reaching consequences with regard to the acceptance of e-NWRs among small and marginal farmers. It has the potential to make a significant impact on the finances of rural depositors by preventing distress sales and releasing better prices for their farm produce.
"Combined with the inherent security and negotiability of the e-NWR system, the Produce Marketing Loan will go long way in improving rural liquidity and increasing farmers' income," the ministry said in the release on Monday.
During the event in which the MoU was signed, there was a brief discussion on the importance of post-harvest pledge financing using warehouse receipts for improving rural credit. The bank representatives have highlighted the risks faced by the lending institutions in this sector.
