In order to popularise Joint Liability Groups (JLG) in Haryana, which primarily consist of tenant farmers and small-scale farmers cultivating land without possessing proper title of their land, Nabard, Haryana (regional office) is planning to induct commercial banks. Since commercial banks have a wide reach in the state, Nabard has written a letter to various commercial banks and feels the banks can play an important role in popularising the scheme among the farming community.
It is worth mentioning a JLG is an informal group comprising preferably of four to ten individuals coming together for the purpose of availing bank loan either singularly or through group mechanism against mutual guarantee. The JLG members would offer a joint-undertaking to the bank, which enables them to avail loans, as well as its members are expected to engage in similar type of economic activities like crop production. Further, it can be formed primarily consisting of tenant farmers and small-scale farmers cultivating land without possessing a proper title of their land.
At present, the scheme is being implemented in Haryana by Haryana Gramin Bank and Gurgaon Gramin Bank in 16 and seven districts, respectively. These two banks have 354 branches in the state including rural and semi-urban area. According to the data, the scheme was introduced in the Haryana last year, and till date 728 groups are being formed involving 3,000 members. At the moment, these two banks have disbursed Rs 10 crore to JLG’s.
Speaking to Business Standard, Nabard, Haryana General Manager R M Kummur said, “To encourage the scheme among the farmers and increasing awareness, we have sent the representatives of state cooperative banks, district cooperative bank and their training centres’ people to Tamil Nadu to have first-hand training about the scheme . We want these banks to conduct workshop for their staff to popularise the scheme and further implement with the help of their branches.”
“Taking a step forward, we want the commercial banks to adopt and implement the scheme. Now we are gearing up to induct commercial banks to popularise the scheme and are planning to send the banks’ staff to Karnataka,” he added. The commercial banks including private sector banks have 548 and 510 branches in rural and semi-urban area respectively.
According to him, 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. Also, the finance to JLG is expected to be a flexible credit product addressing the credit requirements of its members.