21. Financing of Joint Liability Groups (JLGs) of Tenant Farmers, Small Farmers and Marginal Farmers

Eligibility

1. Members should be of similar socio economic status and background carrying out farming activities and who agree to function as a joint liability group.
2. The group must be organized by the likeminded farmers and not imposed by the bank or others.
3. The members should be residing in the same village / area and should know and trust each other well enough to take up joint liability for group / individual loans.
4. The members should be engaged in agricultural activity for a continuous period of not less than one year within the area of operations of the bank branch.
5. The group member should not be a defaulter to any other formal financial institution.
6. JLG should not be formed with members of the same family and more than one person from the same family should not be included in the JLG.
7. There is a need for a very active member of the group to ensure leadership role and ensure the activities of the JLG. The selection of a good / able / active leader for the JLG is an essential need which will ultimately benefit all the JLG members. However, care should be taken to ensure that benami loans are not cornered by the group leader.

Purpose

1. To augment flow of credit to tenant farmers cultivating land either as oral lessees or sharecroppers and small farmers who do not have proper title of their land holding through formation and financing of JLGs.
2. To extend collateral free loans to target clients through JLG mechanism.
3. To build mutual trust and confidence between bank and tenant farmers.

Amount of Loan: Maximum amount of loan may be restricted to Rs.50000/- per individual.

Rate of Interest: Interest rates ranges from 1.50% to 2.50% above Base Rate for various limits.

Security: No collaterals may be insisted upon against the loans to JLGs except mutual guarantee offered by the JLG members.

Repayment: Repayment period based on the activities undertaken by members.

Schemes like Annapoorna, Rabit plus and Kamadhenu are available under JLG

To know more click on the below mentioned schemes:

1. Annapoorna

2. Rabit plus

3. Kamadhenu