Promotion and Financing of Joint Liability Groups (JLGs) – Revision in grant assistance to JLGPIs
1. JLG serves as an important tool for augmenting flow of credit to landless farmers cultivating land as tenant farmers, oral lessees, share croppers and small/marginal farmers and other individuals for taking up farm,
off farm and non-farm activities. NABARD had piloted the JLG model of lending through 13 RRBs in 2004-05, in which 285 JLGs were promoted and bank finance of Rs.4.48 crores was extended to these JLGs.
2. Based on the experience, a separate scheme for promotion & financing of JLGs of tenant farmers, as per Union Budget 2006-07 pronouncement was formulated by NABARD for all SCBs and RRBs in 2006. The Operational Guidelines issued vide Circular No.151 dated 07 September 2006 were revised vide Circular No.169 dated 23 October 2009 incorporating grant assistance of Rs.2000/- to support and incentivise the efforts of the JLGPIs. The scheme was also extended to micro entrepreneurs/artisans in Non-Farm sector vide circular No 203 dated 3rd December 2009. Thereafter, a revised approach in financing JLGs on a mission mode was adopted vide circular No 233 dated 26 November 2014.
3. The grant assistance to the JLGPIs is linked to formation and nurturing as well as credit linkage of JLGs. Findings of the Impact Evaluation Studies on JLGs conducted across the country by NABARD over the last 2 years indicate that the grant assistance is not being fully claimed as the JLGPIs generally discontinue their association with the JLGs due to low incentive over a long drawn out process. Accordingly, a review was undertaken and the grant assistance has now been enhanced from Rs.2,000/- to Rs.4,000/- as per the following support structure :