Methdology

Methdology

A Joint Liability Group (JLG) is an informal group comprising preferably of 4 to10 individuals but can be upto 20 members, coming together for the purposes of availing bank loan either singly or through the group mechanism against mutual guarantee. The JLG members would offer a joint undertaking to the organization that enables them to avail loans. The JLG members are expected to engage in similar type of economic activities like crop production. The management of the JLG is to be kept simple with little or no financial administration within the group. JLGs can be formed primarily consisting of tenant farmers and small farmers cultivating land without possessing proper title of their land / rural entrepreneurs engaged in non-farm activities.
The group should be formed preferably with 4 to 10 members (upto 20 members) to enable the group members to offer mutual guarantee.
Organization may initially form JLGs by using their own staff wherever feasible. Organization may also engage business facilitators like NGOs and other individual rural volunteers to assist organization in promoting the concept and formation of groups. The JLGs of such eligible farmers can also serve as a conduit for technology transfer, facilitating common access to market information; for training and technology dissemination in activities like soil testing, training, health camps and assessing input requirements.
Organization can finance JLG by adopting any of the two models. Model A – Financing Individuals in the Group: Model B – Financing the Group:
The JLG would prepare a credit plan for its individual members and an aggregate of that is submitted to the banks. Banks may evolve simple loan application for this purpose. The individual members of JLG would be eligible for organization loan after the organization verifies the individual members’ credentials.
The finance to JLG is expected to be a flexible credit product addressing the credit requirements of its members including crop production, marketing and other productive and income generating purposes. organization may consider micro credit loan depending upon the purpose of loan.
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