Joint Liability Group

JLG is an innovation in rural finance which has the potential of bringing marginal farmers, tenant farmers and oral lessees into the formal credit fold, is the Joint Liability Group (JLG). These farmers who either do not have land ownership or have problems with their land titles were hitherto shunned by banks, and had to depend solely on moneylenders. Now with the JLG framework providing for the loans to be guaranteed by the other group members and with an element of peer pressure, avenues has opened up for neglected farmers to get institutional credit.

A Joint Liability Group is an informal group comprising preferably of five to ten individuals coming together for the purpose of availing bank loan, either singly or through the group mechanism against mutual guarantee. The members offer a joint undertaking to the bank that enables them to avail loans.