Scheme for Financing Joint Liability Groups (JLGs)

Key Features

An informal group of 4-10 individuals coming together for the purpose of availing Bank Loan on individual basis or through group mechanism against mutual guarantee. Members should belong to similar socio-economic status, background and environment; carrying out agriculture/allied/ nonfarm activities and who agree to function as a Joint Liability Group, so that the group would be homogeneous and organized to develop mutual trust and respect. This ca be availed for Agriculture/Agriculture-Allied/Non-farm/other business activities.

 

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Nature of facility - Term Loan /Cash Credit
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Eligible limit - Maximum loan per JLG member is Rs. 1,00,000/-
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Period - Maximum 60 months
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Security - Primary: Hypothecation of assets wherever created.
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Guarantor/ Co-obligants - Remaining members of the group (no other co-obligant required)
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Turn Around Time - Max 30 Days  subject to satisfaction of internal lending guidelines

Eligibility

  • Primarily smaller group of 4-10 members, who can offer mutual guarantee. 
  • JLGs should not be formed with members of the same family and more than one person from the same family shall not be included in the same JLG.

 

Eligibility norms

  • Members should be residing in the same village/ area/ neighbourhood and should know, trust each other well enough to take up joint liability. 
  • All the members of the JLG should be active enough to assume leadership of the group to ensure the activities of the JLG. 
  •  JLG should hold regular meetings, which must be attended by all the members regularly to discuss issues of mutual interest and to emphasis on the roles and expectations from the members and benefits of group dynamics.
  • Members who have defaulted to any formal financial institutions in the past are debarred from the group membership.
     

Rate of interest

As mutually decided by bank and JLG Promoting Institution.

Processing Fee & Other Charges

Processing Fee

  • Up to Rs.50000/- (per JLG member) : Nil
  • Above Rs.50000/- (per JLG member) : As mutually decided by bank and JLG Promoting Institution
     

Other Charges

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