In a bid to expedite the implementation of Financial Inclusion Plan (FIP) in Gujarat, the National Bank for Agriculture and Rural Development (NABARD) has set ambitious targets to penetrate financial service in the rural regions in the state. Nabard's Gujarat region office aims to add around 3000 Joint Liability Groups (JLGs) in the current year to increase the credit availability to the farmers. JLG is a voluntary group of 4-10 small, marginal or tenant farmers, who would give a mutual guarantee for the credits made available to them. Currently, there are around 500-600 such JLGs operational in the state. In order to meet the targets of financial inclusion in the rural areas in the state, the regional office of Nabard plans to increase the the presence of JLGs in Gujarat.
"Our aim is to make credits available to the land-less farmers or marginal farmers. As they would not have collateral to avail credits, they are asked to form a voluntary group and give mutual guarantee. Banks can leverage on this mutual guarantee as it acts as a collateral substitute. In the current year, we aim to add around 2000-3000 JLGs in the state," said a senior official from Nabard - Gujarat region office.
According to the official, JLG scheme is similar to the self help groups (SHG) scheme, which is popular among the women community. "While, SHG is a savings and credit oriented scheme, JLG is a credit oriented scheme mainly for the farmers," said the official.
Nabard would link up with the Regional Rural Banks (RRBs), commercial banks and non-governmental organisations (NGOs) to identify such farmers and present them as a group. It also plans to bring in agricultural credit cooperative societies to increase the volumes of small-time credits. Further, Nabard also plans to increase the presence of Farmer's Clubs (FCs) in the state. At present, there are about 5000 FCs in Gujarat, of which about 3000 are believed to be active.
FCs are informal forums of farmers, which are organised by rural branches of banks with the support and financial assistance by Nabard. FCs are believed to be one of the successful models for the financial inclusion plan. "We are aiming to increase the presence of FCs in Gujarat from the current about 3000 to one at every village in the state in a period of next three-five years," the official mentioned.
