MICRO-FINANCE

Financing of Joint Liability Group of Farmers:
• A Joint Liability Group (JLG) is an informal group
comprising preferably 4 to 10 individuals that come together
for the purpose of availing bank loans either singly or
through the group mechanism against mutual guarantee.
• JLGs can be formed by small and marginal farmers, tenant
farmers and share croppers.
• The members should normally be residing in the same
village/area and should know and trust each other.
• Banks may initially form JLGs by using their own staff or
engage business facilitators like NGOs and other individual
rural volunteers to assist them in promoting JLGs.
• The JLG is primarily intended to be a credit group; group
savings may be an optional activity.
• The quantum of credit need not be linked to group savings.
• No collaterals may be insisted upon by banks against their
loans to JLGs.

- Jai Prakash Pandey
Director
Rural Self Employment
Training Institute,
Umariya
Madhya Pradesh