Sunday, February 1, 2015


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Joint Liability Group (JLG)
Before understanding JLG, you have to know, what are different types of liability.

  • Jointly Liable - Suppose, two ore more persons have some liability (e.g., taken a loan). Then for a jointly liable system, they each are fully liable to the loan (meaning if one is unable to pay, then other is fully liable to pay the whole amount of loan)
  • Severally Liable - In this type of liability, each is liable only to his own portion of the liability (i.e., loan) (meaning if one is unable to pay for whatever reason, other will not be sued, or bothered, he will be liable for only his portion of loan)
Therefore, JLG is an informal group (comprising around 4-10 person) for the purpose of availing bank loan on individual basis (Severally Liable) or through group mechanism against mutual guarantee (Jointly Liable).

Generally, the members of JLG would engage in a similar type of economic activity in the Agriculture and Allied Sector. The members would offer a joint undertaking to the bank that enables them to avail loans. They support each other in carrying out their occupational and social activities.

Self Help Group (SHG)
SHG is a small voluntary group (less that 20) of poor people, generally from the same economic background. They promote small savings among their members, and make a common fund, which is kept in a bank

SHGs comprise poor people, and they generally do not have access to formal financial institutions (banks). So this concept helps them to directly connect with banks. Also they act as the forum for the members to provide space and support each other. 

Currently there are several SHG bank linkage program for this purpose.

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