The Hindu Business Line : Nabard to finance joint liability groups in Bengal

National Bank for Agriculture and Rural Development (Nabard) has introduced a financing scheme in West Bengal through the formation of joint liability groups (JLG) for small and marginal farmers, tenant farmers, oral lessees and share croppers, according to its Chief General Manager, Mr P. Mohanaiah.

Under the scheme, the farmers can come together in a group and access credit for agriculture and allied activities.

“Unlike in a SHG where the group usually comprises about 20 members, here the group will comprise four to ten members,” Mr Mohanaiah said.

Funding the farmers through joint liability groups (JLG) will help both banks and farmers reduce the risk of default, said a press statement issued by Nabard, which aims to achieve a farm sector lending target of Rs 13,400 crore during the current fiscal in West Bengal.

Apart from the usual refinance support, Nabard will also provide financial support to cooperative banks, regional rural banks, Panchayat Raj institutions, Krishi Vikas Kendras and farmers’ clubs for the promotion of JLGs under the scheme and help farmers access bank loans, he said.

The move will help ensure augmentation of credit flow to farmers by using JLGs as collateral substitute.

“It will also help build mutual trust and confidence between bank and the target group and minimise the risks in the loan portfolio for the banks through group approach, cluster approach, peer education and credit discipline,” he added.

More Stories on : Agricultural Institutions | West Bengal

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