FINANCING JOINT LIABILITY GROUPS

The SHG Bank Linkage has been proved to be successful in providing access to financial services from the formal Banking Sector to the poorest of the poor. In order to develop effective credit products for small / marginal / tenant farmers, oral lessees and share croppers, as also entrepreneurs engaged in various non-farm activities, the scheme for Joint Liability Groups was launched.

Thrissur-DCB is the leading bank in the State in promoting and credit linking 1515 JLG's and offered loan to the tune of Rs. 32 crores [Year 2014-2015]

The salient features of the scheme are as under.


Objectives
  • To augment flow of credit to farmers, especially small, marginal, tenant farmers, oral lessees, sharecroppers /individuals taking up farm activities
  • To extend collateral free loans through JLG mechanism
  • To build mutual trust and confidence between Banks and the borrowers
  • To minimize risk in the loan portfolio for the banks through group approach, cluster approach, peer education and credit discipline
Eligibility
  • 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 group must be organized by the likeminded farmers / individuals
  • The members should be residing in the same village / area and should know and trust each other well enough to take up joint liability for group / individual loans.
  • The group member should not be a defaulter to any other formal financial institution.
  • JLG should not be formed with members of the same family and more than one person from the same family should not be included in the JLG.
  • There is a need for a very active member of the group to ensure leadership role and ensure the activities of the JLG. The selection of a good / able / active leader for the JLG is an essential need which will ultimately benefit all the JLG members.
  • The group should be ideally of 4 to 7 members to enable the group members to offer mutual guarantee
Loan schemes to JLG's
Purpose

Crop loan is provided to meet all expenses involved in raising crops like Paddy, Banana, Vegetables etc including various agronomic practices.

Eligibility JLG's [including tenant farmers, share croppers.
Quantum of Loan

The loan amount would be fixed based on the scale of finance fixed by DLTC every year. Maximum amount Rs. 3 lakhs per JLG.

Rate of interest

7%

Repayment period

12 months

Insurance

All eligible [notified] crops would be covered by Crop Insurance Schemes of AIC

Other features

Interest subvention/ Incentive for prompt repayment available as per norms

Purpose

DAIRY

For purchase and rearing of high yielding milch cattle, dairy equipments, cattle feed, animal insurance, cultivation of green fodder, transportation of animal, setting of on-farm processing & pasteurization plants, setting up of on-farm bio gas plan etc. Purchase and rearing of cross-bred heifers.

POULTRY / DUCK REARING

For establishing / improving layer / broiler farms and hatcheries including purchase of chicks, feeds, insurance, medicines, equipments, construction of poultry sheds. Also for rearing Ducks / Turkeys / Qualis

GOAT / RABBIT REARING

For purchase and rearing of goats, feed, animal insurance, cultivation of green fodder, transportation of animal, construction of shed et. Also for rearing rabbits and construction / purchase of cages and shed

FISH FARMING

Construction / deepening / widening / desilting of existing ponds, purchase of fingerlings, feed, equipments, manure etc.

DRIP / SPRINKLER / PUMPSET

Purchase of electrical motor, submersible irrigation pumpset, energization of agricultural pumpset, pipelines including installation charges, installation of drip and sprinkler, fertilizer mixtures etc and any other modern irrigation units.

Quantum of loan

As per the amount (unit cost) fixed by the government agencies for the place. Loan is project based and disbursed in stages.

Maximum loan amount Rs. 5 lakhs per JLG

Rate of interest

11%

Repayment period

5 years

Purpose

Soap powder making, candle making, DTP center, Book binding, Herbal products, Furniture making, Hand-made jewellery, Handicrafts making and similar micro-economic activities.

Quantum of loan

As per the project prepared by the Bank based on the activity proposed by the JLG. Loan is disbursed in stages.

Maximum loan amount Rs. 5 lakhs per JLG

Rate of interest

11%

Repayment period

3 years