National Bank for Agriculture and Rural Development (NABARD) and J&K Grameen Bank have signed a Memorandum of Understanding (MoU) to promote and finance 2,000 Joint Liability Groups (JLGs) across Union Territories of Jammu & Kashmir and Ladakh. This initiative aims to enhance credit access for landless farmers, tenant farmers, sharecroppers, and weaker sections of society.
Key Highlights of MoU
Target Beneficiaries:
- Tenant farmers, sharecroppers, oral lessees, landless farmers, and economically weaker sections.
- Individuals who lack formal land ownership but require financial assistance.
Objectives of Initiative:
- To improve credit availability for those who do not have formal land titles.
- To strengthen financial inclusion by providing credit linkages to JLGs.
- To facilitate timely loan renewals for continued economic activities.
NABARD’s Contribution:
- NABARD has committed to providing a promotional grant of ₹4,000 per JLG under this MoU.
J&K Grameen Bank’s Commitment:
- The bank has previously financed over 2,500 JLGs under similar agreements.
- Chairman Sanjay Gupta reaffirmed the bank’s commitment to expanding financial services in remote areas through credit linkages and social security schemes.
About Joint Liability Groups (JLGs)
A Joint Liability Group (JLG) is an informal group of 4 to 10 individuals who come together to avail bank loans either individually or as a group under a mutual guarantee mechanism.
Features of JLGs:
- Provides collateral-free loans based on peer partnership.
- Members typically engage in similar economic activities, such as crop production and non-farm activities.
- Simple management structure with minimal financial administration within the group.
- Offers flexibility for members to pursue individual economic activities while ensuring financial security through group support.
Significance of Initiative
Financial Inclusion: Strengthens access to credit for marginalized farmers and rural entrepreneurs.
Boost to Agriculture & Rural Economy: Encourages sustainable farming and rural economic development.
Strengthening Rural Banking: Expands JLG-based credit programs, increasing NABARD’s reach in J&K and Ladakh.