State Bank of India and Nabard have signed an agreement with five NGOs in Bengal for the promotion of 2500 joint liability groups (JLGs) in select districts of the state.

Facts :

• The bank plans to extend assistance to the financially excluded sections of the society, especially landless farmers in the districts of Purulia, Paschim Medinipur, Purba Medinipur, Burdwan and North 24 Parganas through these JLGs.
• The bank hopes to be able to extend support to close to 12,500 tenant farmers under this arrangement. Plans are being made to extend the project in a phased manner to cover the remaining districts.
• Nabard has fixed a target of credit linking 80,000 JLGs in West Bengal in 2017-18.
• It has sanctioned assistance for the promotion of 60,000 JLGs by various NGOs in the state through 339 projects in different districts till date.

About NABARD's Joint Liability Group (JLG) :

• Rural development agency National Bank for Agriculture and Rural Development (NABARD) announced to form a new concept called Joint Liability Group (JLG) on 24 February 2014.
• JLG scheme will be highly beneficial for states where average land holdings are shrinking and strength of such farmers is large in these states.
• Similar on the pattern of Self Help Groups (SHG), NABARD will provide refinance facility to banks for providing loans and financial assistance to small and marginal farmers who are normally deprived of finance.
• JLGs are informal groups of 4-10 members but can be up to 20 members, engaged in similar economic activities and willing to jointly undertake the responsibility to repay bank loans either singly or through the group mechanism against mutual guarantee.
• JLGs can be formed primarily consisting of tenant farmers and small farmers cultivating land without possessing proper title of their land / rural entrepreneurs engaged in non-farm activities.
• The management of the JLG is to be kept simple with little or no financial administration within the group.
• The JLG members are expected to engage in similar type of economic activities like crop production.