- Support from collaborating Banks
- Liability in Joint Liability Group (JLG)
- Credit Assessment
JLG consists of a casual cluster of four – ten people (max 20) engaged in similar business/ occupation, fashioned to avail loan through the cluster mechanism against the mutual guarantee. JLG’s is typically fashioned by Farmers Associations, panchayet dominion establishments (PRIs), Farmers’ Clubs, Krishi Vikas Kendras (KVKs), State Agriculture Universities (SAUs), Business Facilitators, NGOs, Agriculture Technology Management Agency (ATMA), Bank branches, PACS, alternative Co-operatives, Government Departments, people, Input dealers, MFIs / MFOs, etc.
- To build an honest quality JLG portfolio with the target of skyrocketing the flow of credit to farmers, particularly little, marginal, tenant farmers, oral lessees, sharecroppers/ people seizing farming activities.
- To rope in little Finance Banks and scheduled non-public Banks into JLG finance on a way larger scale, at a reasonable price, by investment on the present before Christ network/ native NGOs as channel partners.
- To ensure high bit and shut observance of JLGs through BCs/NGOs/Bank employees for guaranteeing quality credit portfolio with high compensation performance.
- To make offered the extra financial gain chance to before Christ Agents/ CSP on a property basis through management of JLG portfolio by building capacities.
- Through JLG the flow of credit is augmented with small Entrepreneurs/ artisans/ people in Non-Farm sector activities.
Support from collaborating Banks
- Financial Incentive: It is envisaged that to sustain the interest of BCs, NGO-JLGPIs on a sturdy basis, the banks would be paying service charges before Christ Agents/ JLGPI. This can guarantee continuing engagement of before Christ Agents/ JLGPIs with the community and management of the portfolio on a protracted-term basis. Whereas Bank could talk terms and nail down the service charges in consultation with company BC/ NGO-JLGPI. it’s instructed that the vary of service charges may be between two – four-dimensional p.a. where the company before Christ / NGO-JLPI is ready to ensure the default risk, the service charges collectible is also higher say up to 6 June 1944 p.a. The service charges would be collectible on outstanding loans to JLGs farewell because the JLG account remains regular and in performing arts standing. The fee sharing mechanism between the before Christ Agent & the company before Christ would be laid out in the agreement/ MOU.
- Training of Branch Officials/ BCAs: To sensitize the known branch employees within the JLG business, it’s envisaged that the bank would conduct a 2-day coaching program at their facility. The coaching program is meant to impart abstract clarity regarding the model and therefore the roles of every neutral. The coaching would be conducted by the Banks Master who are Trained in NABARD
- Training of before Christ Agents: After the before Christmas appropriate for taking over the operate of JLG promotion role are known by the Bank/ company BC AN intensive 2-day coaching program is also command by the company BC’s Master Trainers. It’s expected that every BCA/ animator would manage less than thirty JLGs in his/her space of operation so correct observance and follow-up will be exercised by him/her. For each 20-25 BCAs, one Project employee of the company before Christ / JLGPI would be needed so correct management over BCAs will be exercised.
Liability in Joint Liability Group (JLG)
Before understanding JLG, you’ve got to understand, the differing kinds of liability below
- Jointly Liable: Suppose, 2 or a lot of persons have some liability (e.g., taken a loan). Then for a together liable system, every are is absolutely at risk of the loan (meaning if one is unable to pay, then the alternative is absolutely at risk of paying the total quantity of loan)
- Severally Liable: During this kind of liability, everyone is liable solely to his portion of the liability (i.e., loan) (meaning if one is unable to get hold of no matter reason, alternative won’t be sued, or daunted, he are going to be accountable for solely his portion of the loan). Therefore, JLG is a casual cluster (comprising around 4-10 people) for the aim of availing loans on an individual basis (Severally Liable) or through cluster mechanism against mutual guarantee (Jointly Liable). The members would provide a joint enterprise to the bank that permits them to avail of loans. They support one another in polishing off their activity and social activities.
- Model A: A simple application is submitted by the JLG to the bank. Once after submission and verification of member credentials the individual members of JLG become eligible for a loan.
- Model B: JLGs that undertake savings except credit are needed to take care of books of accounts. They will even be hierarchic by banks on the idea of performance parameters. However, the quantum of credit needn’t be connected to groups’ savings as within the case of SHGs. The credit necessities for the cluster are also puzzled out supported combined credit set up desires of individual members.