Joint Liability Group (JLG

Joint Liability Group (JLG
A Joint Liability Group (JLG) is an informal group comprising preferably of 4 to10 individuals 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 bank 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.

Members should be of similar socio economic status and background carrying out farming activities and who agree to function as a joint liability group.
The groups must be organised by the likeminded farmers and not imposed by the bank or others.
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.
Size of the JLG

The group should be formed preferably with 4 to 10 members to enable the group members to offer mutual guarantee.

Formation of JLGs

Banks may initially form JLGs by using their own staff wherever feasible. Banks may also engage business facilitators like NGOs and other individual rural volunteers to assist banks in promoting the concept and formation of groups. State Government Departments like Agriculture Department also could form JLGs of tenant farmers and small farmers not having clear land title. 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.