Ø      Eligibility :

à  JLGs can be formed primarily consisting of tenant farmers and small farmers cultivating land with out possessing proper title of their land.

à  JLG members should be of similar socio economic status and background carrying out farming activities and who agree to function as a joint liability group. The members should trust each other well enough to take-up joint liability for group / individual loans.

à  The members should be engaged in agricultural activity for a continuous period of not less than one year.

à  The members should not be a defaulter to any other formal financial institution.

à  JLG should not be formed with members of the same family and not more than one person from the same family should not be included in the JLG.

à  Very active member of the group should be the leader of JLG and care should be taken to ensure that benami loans are not cornered by the group leader.

Ø      Purpose :

à  To augment flow of credit to tenant farmers cultivating land either as oral lessees or share croppers and small farmers who do not have proper title of their land holding through formation and financing of JLGs.

à To extend collateral free loans to target clients through JLG mechanism.

à To build mutual trust and confidence between Banks and tenant farmers.

Ø      Amount of loan :

à  Maximum amount of loan is restricted to Rs 50,000 per individual.

Ø      Rate of Interest :         

Crop loan:

Upto Rs 50,000    -      @ 7% P.A (Under 2% interest subvention from Govt of India)

Term Loan:

Upto Rs 50,000    -      @BPLR+TP-2.50% = 10.50%.

Ø      Margin and Security Norm :

à  No collateral. However, mutual guarantees offered by the JLG members are kept on record.

Ø      Repayment :

à  Loan amount to be adjusted within 2 months from the date of harvest of the crop grown.