With an objective to further empower Farmer Producer Companies, the Small Farmers’ Agribusiness Consortium (SFAC) has announced the roll out of a new scheme called the Equity Grants and Credit Guarantee Fund Scheme (EGCGFS).
The scheme has been developed following the Union Finance Minister’s announcement of two major initiatives; one to support FPCs through matching grants and the second to set up a fund to cover banks which advance loans to Farmer Producer Organisations (FPOs) without collaterals.
In order to generate more awareness about this scheme, SFAC will conduct camps in Bihar, Madhya Pradesh and West Bengal. The awareness camps will also be conducted in Bhopal.
The Equity Grant Fund Scheme enables eligible FPCs to receive a grant equivalent in amount to the equity contribution of their shareholder members in the FPC, subject to a cap of `10 lakh, thus enhancing the overall capital base of the FPC.
The Equity Grant Scheme aims at enhancing viability and sustainability of FPCs, increasing their credit worthiness and enhancing their shareholding of members to increase their ownership and participation in the FPC.
The maximum grant per category of shareholder would be `1,000 for individual shareholders and a maximum of `20,000 for a group of individual shareholders.
The Credit Guarantee Funds Scheme has been set up with the primary objective of providing a Credit Guarantee Cover to Eligible lending Institution (ElI) to enable them to provide collateral free credit to FPCs by minimising their lending risks in respect of loans not exceeding `100 lakh.