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e-KUN: Transforming Agricultural Credit for a Resilient Future

Over 10,000 farmer suicides occur annually, many due to debt burdens and exploitation by local moneylenders.
11:13 PM Feb 04, 2025 IST | Rakesh Magotra
e kun  transforming agricultural credit for a resilient future
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A few months ago, I met an old farmer Bal Krishan, in a village near Akhnoor. He had harvested a bumper paddy crop, yet his face was clouded with worry. “If I don’t sell my produce immediately, how will I repay my debts?” he asked, fearing the moneylender’s wrath. He had two choices—sell it immediately at a distressingly low price or take a loan against it and wait for better market rates. With no easy access to credit, he sighed and handed over his crop to a local trader, earning barely enough to repay last season’s debts.

This is the harsh reality for millions of Indian farmers. Nearly 67 million metric tons of food grains go to waste annually due to poor storage and financial constraints. The irony is heartbreaking. The hands that feed the nation often struggle to feed themselves. Over 10,000 farmer suicides occur annually, many due to debt burdens and exploitation by local moneylenders.

To break this vicious cycle, the Government of India has launched the e-Kisan Upaj Nidhi (e-KUN) under the Digital India Mission—a revolutionary initiative that enables farmers to access low-interest loans against their stored produce. This is more than just a financial scheme; it is a shield against distress selling, a tool for economic empowerment, and a giant step towards an Atmanirbhar Bharat.

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Policymakers Driving a Global First

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What makes EKUN truly unique is that nowhere else in the world has a government-driven digital marketplace been designed at such a large scale to facilitate post-harvest credit. This initiative, developed through the collaborative efforts of WDRA, NABARD, the Department of Food & Public Distribution and the Department of Financial Services, ensures scientific storage, structured financing, and financial inclusion for even the smallest farmers. Banks are actively promoting the platform, expanding its reach to rural areas.

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This visionary policy shift recognizes that financial security is just as important as crop yield for farmers. By bridging the gap between storage, credit and market access, EKUN is set to revolutionize post-harvest management in India.

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How EKUN Works: A Digital Lifeline for Farmers

EKUN is a one-stop digital gateway that allows farmers with stocks in Warehousing Development and Regulatory Authority (WDRA) registered warehouses to obtain post-harvest loans. The entire process is seamlessly integrated with government databases, making it easier and quicker for farmers to access credit:

  1. Farmer Registration – Farmers must register themselves on the EKUN platform on Jan Smarth Portal using their repository account details authorized by WDRA.
  2. Digital Authentication – The system electronically verifies farmer credentials through UIDAI, CBDT, and other linked databases.
  3. Loan Offers & Selection – The EKUN portal uses a rule engine to assess the farmer’s creditworthiness (e.g., CIBIL score) and provides a list of banks offering loans. Farmers can compare interest rates and loan amounts before selecting the best option.
  4. In-Principle Loan Approval – Once a loan is chosen, the platform digitally approves it, reducing turnaround time for loan disbursement.
  5. Loan Disbursement – Farmers visit the selected bank for final documentation and receive funds against their electronic Negotiable Warehouse Receipts (e-NWRs).

EKUN is a groundbreaking effort under the Digital India mission, ensuring seamless credit access through electronic Negotiable Warehouse Receipts (e-NWRs). With loans of up to ₹75 lakh for small farmers and ₹2 crore for traders, backed by a 1,000 crore credit guarantee, this initiative aims to increase post-harvest lending from ₹40,000 crore to ₹5.5 lakh crore in the next decade. Interest rates are capped at MCLR + 3%, making credit more affordable.

The Road Ahead: A Banker’s Perspective

EKUN is a revolutionary digital platform that connects farmers directly with lenders. By integrating financial institutions, it provides farmers access to credit at reasonable interest rates, reducing their dependence on informal lenders. This initiative not only prevents distress sales but also empowers farmers with knowledge on post-harvest management and value addition.

Policymakers deserve immense credit for conceptualizing and implementing a digital marketplace of this scale. Nowhere else in the world has a government-driven initiative attempted to integrate the entire agricultural value chain with technology in such a robust manner. By linking farm produce with storage, processing, and financial services, EKUN is a pioneering effort towards sustainable agriculture and farmer prosperity.

However, for this initiative to achieve its full potential, all stakeholders—farmers, banks, agribusinesses, and policymakers—must collaborate effectively. As a banking professional with 25 years of experience, I offer a few pragmatic suggestions:

  1. Financial Literacy Drives – Farmers need training on using digital platforms for selling produce, applying for credit and managing finances effectively.
  2. Customized Credit Products – Banks should develop tailored loan schemes that align with crop cycles ensuring easy repayment without financial stress.
  3. Robust Warehousing & Logistics Support – The private sector should be incentivized to invest in cold storage and transport infrastructure to reduce wastage.
  4. Market Linkages – Farmer tie-ups with food processing units and export firms will ensure farmers get better value for their produce.

To conclude, EKUN is not just a scheme; it is a paradigm shift in India’s agricultural landscape. With the right synergy among stakeholders, it has the potential to transform farming into a profitable and dignified profession, securing the livelihoods of millions of farmers like Bal Krishan. The time to act is now—India’s farmers deserve nothing less.

Author is a DGM in JK Bank (Views expressed are personal).