Fund to provide credit guarantee to FPOs

The National Bank for Agriculture and Rural Development (Nabard) said that to provide credit guarantees to 10,000 Farmer Produce Organisations (FPOs), ₹1,000-crore dedicated fund will be kept in  “Credit Guarantee Fund Trust for FPOs” (CGFTFPO). The trust is under the trusteeship of NABSanrakshan Trustee Private Limited (NTPL) and is signed by Ministry of Agriculture and Farmer Welfare’s officials.

₹1,000-crore fund under CGFTFPO

Nabard said, “It is expected that the credit guarantee offered through the Trust will enhance the credit worthiness of FPOs besides facilitating cost-effective production and productivity leading to higher net income to farmers who are members of FPOs.”

As per the statement from Nabard, CGFTFPO is only second such trust formed for agriculture and allied sector which is focused at providing credit guarantee. As per Ministry of Agriculture and Farmers Welfare, FPOs are developed in produce clusters wherein agriculture and horticulture produces are cultivated, leveraging economies of scale along with getting larger market access.