ANNEXURE-I
The Scheme for JLG financing small, marginal, tenant and oral lessee farmers.
Objectives:
- To augment flow of credit to farmers, especially small, marginal, tenant farmers, oral lessees, share croppers / individuals taking up farm activities.
- To serve as collateral substitute for loans to be provided to the target group.
- To build mutual trust and confidence between bank and the target group.
- To minimize the risks in the loan portfolio for the banks through group approach, cluster approach, peer education and credit discipline.
- To provide food security to vulnerable section by enhanced agriculture production, productivity and livelihood promotion through JLG mechanism.
General features of JLG:
A Joint Liability Group (JLG) is an informal group comprising of 4-10 individuals coming together for the purpose of availing bank loan on individual basis or through group mechanism against mutual guarantee. Generally, the members of a 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. JLG members are expected to provide support to each other in carrying out occupational and social activities.
Criteria for membership:
- Members should belong to similar socio-economic status, background and environment carrying out farming and Allied activities and who agree to function as a joint liability group. This way the groups would be homogeneous and organized by likeminded farmers/Individuals and develop mutual trust and respect.
- The members should be residing in the same village / area / neighbourhood and should know and trust each other well enough to take up joint liability for group/ individual Loans.
- Members who have defaulted to any other formal financial Institution, in the past, are debarred from the Group Membership.
- More than one person from the same family should not be included in the same JLG.
Group Approach:
- All members of the JLG should be active enough to assume leadership of the group to ensure the activities of the JLG. The selection of an effective / able / active leader for the JLG is essential as this will ultimately benefit all the JLG members. The leader fosters a sense of unity, oversees and maintains discipline, shares information and facilitates repayments. For the bank, he is the focal point for group activities.
- The JLG should hold regular meetings which must be attended by all the members regularly to discuss issues of mutual interests.
- The principles of self - help and group strength need to be emphasized. Group cohesion has to be ensured. Adequate emphasis should be placed on the roles, expectations and functions of the group/ members & the benefits of group dynamics.
- The JLG can easily serve as a conduit for technology transfer, facilitating common access to market information, for training and technology dissemination in activities like soil testing, training and assessing input requirements.
- The JLGs for specific activity, e.g. production of pulses / vegetables / fruits may be federated at village/ block level for development of the product.
- The JLG in the clusters on their stabilization could come together in the form of cluster federation or producers’ companies with a view to contributing the entire value chain and thereby achieving economics of scale in procurement, processing and marketing of the produce.
- The JLGs and evolving JLG structures are expected to build up empathy and understanding and create responsive lending mechanisms leading to greater interaction and interdependence between the members of JLGs.
Who can form JLGs:
Business Facilitators, NGOs, Farmers Clubs, Farmers Associations, Panchayat Raj Institutions (PRIs), Krishi Vikas Kendras (KVKs), State Agriculture Universities (SAUs), Agriculture Technology Management Agency (ATMA), Bank branches, PACS, other cooperatives, Govt. Depts., Individuals, Input dealers, and Document writers (in cooperative banks), MFIs / MFOs, etc.
Savings:
JLG members need to be encouraged to save regularly. Branches may open savings account by the JLG / individual members of the JLG to ensure regular savings and thrift habit amongst them. However the quantum of loan to be given to the groups should be related to the credit needs of the enterprise and not to the quantum of savings.
JLG Models:
Branches can finance JLGs by adopting any of the two models.
JModel A – Financing Individuals in the JLG:
Each member of the JLG should be provided an individual KCC. The financing branch could assess the credit requirement, based on the crop to be cultivated, available cultivable land / activity to be undertaken and the credit absorption capacity of the individual. All members would jointly execute a loan document, making each one jointly and severally liable for repayment of all loans taken by all individuals belonging to the group.
The mutual agreement needs to ensure consensus among all members about the amount of individual debt liability that will be created including liability created out of the individual KCC. Any member opting out of group or joining the group, will necessitate a new loan agreement, to be kept on record in the branch.
Model B – Financing the JLG as a Group:
The JLG functions, operationally as one borrowing unit. The group would be eligible for accessing one loan, which could be combined credit requirement of all its members. The credit assessment of the group could be based on the available cultivable area of each member of the JLG / activity to be undertaken. All members would jointly execute the document and own the debt liability jointly and severally./p>
The mutual agreement needs to ensure consensus among all members about the amount of individual debt liability that will be created. Any change in composition of the group, will lead to a new document being registered by the branch.
Credit Appraisal:
Branches should conduct a thorough credit appraisal to avoid under or over-financing. Suitable rating tools are already available for the purpose.
The finance to JLG is expected to be a flexible credit product addressing the credit requirements of its members including crop production, marketing and investment credit, besides other productive purposes in the agriculture and allied sectors.
All other norms of financing including rate of interest, margin on security, documentation, coverage under crop insurance scheme and personal accident insurance, etc., may be followed by the branch as per the extant guidelines in this regard.
Credit to JLGs of farmers to form normal business activity under Priority Sector:
Lending to JLGs of farmers may be treated as direct agricultural advances under the priority sector.
Please contact your nearest BGVB branch for additional information.
Terms & conditions apply.
ANNEXURE-II
The Scheme for financing Joint Liability Groups (JLGs) of Micro Entrepreneurs / artisans / others in Rural Non-Farm Sector.
Objectives:
- To augment flow of credit to Micro entrepreneurs /artisans/individuals in Non Farm sector activities.
- To serve as collateral substitute for loans to be provided to the target group.
- To build mutual trust and confidence between bank and the target group.
- To minimize the risks in the loan portfolio for the banks through group approach, cluster approach, peer education and credit discipline; and
- To provide sustainable livelihood opportunities to vulnerable section for enhanced Productivity and livelihood promotion through JLG mechanism.
General features of JLG:
A Joint Liability Group (JLG) is an informal group comprising of 4-10 individuals coming together for the purpose of availing bank loan on individual basis or through group mechanism against mutual guarantee. Generally, the members of a JLG would engage in a similar type of economic activity in the Non farm Sector. The members would offer a joint undertaking to the bank that enables them to avail loans. JLG members are expected to provide support to each other in carrying out occupational and social activities.
Criteria for membership:
- Members should belong to similar socioeconomic status, background and environment carrying out non- farm activities and agree to function as a Joint Liability Group. This way, the groups would be homogeneous, organized by Individuals and develop mutual trust and respect.
- The members should be residing in the same village / area / neighborhood and should know and trust each other well enough to take up joint liability for group / individual Loans.
- Members who have defaulted to any other formal financial Institution, in the past, are debarred from the Group Membership.
- More than one person from the same family should not be included in the same JLG.
Group Approach:
- All members of the JLG should be active enough to assume leadership of the group to ensure the activities of the JLG. The selection of an effective /able/active leader for the JLG is essential as this will ultimately benefit all the JLG members. The leader fosters a sense of unity, oversees and maintains discipline, shares information and facilitates repayments. For the bank, the leader is the focal point for group activities.
- The JLG should hold regular meetings which must be attended by all the members regularly to discuss issues of mutual interests.
- The principles of self - help and group strength need to be emphasised. Group cohesion has to be ensured. Adequate emphasis should be placed on the roles, expectations and functions of the group / members & the benefits of group dynamics.
- The JLG can easily serve as a conduit for technology transfer, facilitating common access to market information, for training and technology dissemination in activities relating to non farm sector training and assessing input / raw material requirements.
- The JLGs for specific nonfarm activity, e.g. production of handicrafts / other non farm products may be federated at village/ block level for development of the product.
- The JLG in the clusters on their stabilization could come together in the form of cluster federation or producers' companies with a view to contributing the entire value chain and thereby achieving economies of scale in production and marketing of the product.
- The JLGs and evolving JLG structures are expected to build up empathy and understanding and create responsive lending mechanisms leading to greater interaction and interdependence between the members of JLGs.
Who can form JLGs:
Business Facilitators, NGOs, Farmers Clubs, Farmers Associations, Panchayat Raj Institutions (PRIs), Krishi Vikas Kendras (KVKs), State Agriculture Universities (SAUs), Agriculture Technology Management Agency (ATMA), Bank branches, PACS, other cooperatives, Govt. Depts., Producer Associations , Artisan Guilds, Department of SMEs, Small Scale industries / Agro industries, Individuals, Input dealers, and Document writers (in cooperative banks),MFIs / MFOs, etc.
Savings:
JLG members need to be encouraged to save regularly. Branches may open savings account by the JLG / individual members of the JLG to ensure regular savings and thrift habit amongst them. However, the quantum of loan to be given to the groups should be related to the credit needs of the enterprise and not to the quantum of savings.
JLG Models:
Model A – Financing Individuals in the JLG:
Each member of the JLG could be provided with an individual Swarojgar Credit Card (SCC) or any other specifically designed card or general credit card. The branch should assess the credit requirement, based on the product / enterprise / activity to be undertaken and the credit absorption capacity of the individual. All members would jointly execute a loan document, making each one jointly and severally liable for repayment of all loans taken by all individuals belonging to the group.
The mutual agreement needs to ensure consensus among all members about the amount of individual debt liability that will be created including liability created out of the individual Swarojgar Credit Card or any other card. Any member opting out of group or joining the group will necessitate a new loan agreement, to be kept on record in the branch.
Model B – Financing the JLG as a Group:
The JLG functions, operationally, as one borrowing unit. The group would be eligible for accessing one loan, which could be combined credit requirements of all its members. The credit assessment of the group could be based on the micro enterprise / activity to be undertaken. All members would jointly execute the document and own the debt liability jointly and severally. The mutual agreement needs to ensure consensus among all members about the amount of individual debt liability that will be created. Any change in the composition of the group, will lead to a new document being registered by the branch.
Credit Appraisals:
Branches should conduct a thorough credit appraisal to avoid under or over-financing. The finance to JLG is expected to be a flexible credit product addressing the credit requirements of its members including production/working capital, marketing and investment credit, besides other productive purposes in the non farm sector .All other norms of financing including rate of interest, margin on security, documentation, coverage under insurance scheme and personal accident insurance, etc., may be followed by the branch as per extant guidelines in this regard.
Priority Sector:
Credit to JLGs of Micro enterprises / artisans/ individuals in Non-Farm Sector will be treated as normal business activity under Priority Sector.
Please contact your nearest BGVB branch for additional information.
Terms & conditions apply.
Introduction Form / Master Data
To the Manager
Bangiya Gramin Vikash Bank
_________________Branch
Dear Sir,
We, the residents of _________ village and members of ___________JLG would jointly like to register as potential customers of your Bank. |
| 1. Our Names are:
|
| 2. Our addresses are:
|
3. Our main occupation are__________________ |
| 4. Our Bank A/c No. with your Branch
|
| 5. We hereby jointly apply for aggregate credit limit of Rs __________________ for the purpose of Agril. Production Credit /Agril. Investment Credit/ Activity to Allied Agricultural / Consumption loan/ Micro Enterprise (Manufacturing and Service) as follows
|
6. Detailed applications for credit is annexed herewith.
7. We undertake to stand Guarantors to the loan extended to each one of us. In case of default on the part of any of Mutual Borrowers in repayment of instalment, principal amount, interest, service charges and any other charges that may be due to the Bank or in regularising or clearing the amounts as per the terms of sanction accepted individually, the Mutual Guarantors, who offer Guarantee collectively to their individual loans shall remain responsible jointly and severally for making necessary payments to Bank.
Declaration
- We hereby declare that the particulars given are true and correct to the best of my knowledge and belief.
- We hereby authorise the Bank to disclose all or any particulars or details or information relating to my loan accounts with the Bank to any other financial institution/Government or agency (ices) as may be considered necessary or desirable by the Bank.
- It will be in order for the Bank to disqualify me/from receiving any credit facilities from the Bank in case it is proved that the declaration of my outside borrowings as above contain misrepresentation of facts.
- We further declare that I have no borrowings from any other agency on the date of application.
- We have gone through the JLG scheme of the Bank and the rules, terms and conditions framed there under and undertake to act in conformity with the same.
- We also undertake to obey and abide by all orders/directions rules made or framed by the Bank from time to time in connection with the said JLG scheme.
Place:
Date:
Applicants' Signatures |
Joint Liability Agreement
Mutual Agreement made this ________day of ___________________20 _______by Smt/Shri
1)________________________D/o/W/o/S/o ___________________aged___________Years
2)________________________D/o/W/o/S/o ___________________aged___________Years
3)________________________D/o/W/o/S/o ___________________aged___________Years
4)________________________D/o/W/o/S/o ___________________aged___________Years
5)________________________D/o/W/o/S/o ___________________aged___________Years
All members of ____________Joint Liability Group, hereinafter called the"Mutual Guarantors" of the first part, which expression shall be deemed to include their heirs, executors, administrators, assigns and all persons deriving title from them, in favour of Bangiya Gramin Vikash Bank, with its Head Office at Berhampore and a branch Office, among others, at _________________ represented by the Branch Manager, Shri/ Smt. __________________________________ hereinafter called BANK, which expression shall be deemed to include their administrators, assignees, successors and attorneys on the other part.
Whereas the Mutual Guarantors are in need of loan for the purpose of _______________ and at their request and individual on Demand Promissory Note executed by each one of them, BANK has agreed to grant to the borrowers credit facility as per terms and conditions mentioned in the Letter of Undertaking executed by each one of them.
The Mutual Guarantors stand Guarantee to the loan extended to each one of them. In case of default on the part of any of Mutual Borrowers in repayment of installment, principal amount, interest, service charges and any other charges that may be due to the Bank or in regularising or clearing the amounts as per the Letter or Undertaking executed individually, the Mutual Guarantors, who offer Guarantee collectively to their individual loans shall remain responsible jointly and severally for making necessary payments to Bank.
The Promissory Note and Letter of Undertaking executed by the Mutual Guarantors individually are part and parcel of this agreement.
The Mutual Guarantors authorise Bangiya Gramin Vikash Bank to exercise lien on the cash security held on their behalf and adjust this cash security against the unpaid balance of loan outstanding on or after due date of any other Mutual Guarantor of their group.
In witness whereof the Mutual Guarantors and BANK have hereunto respectively set their hands at _________________________ on the date mentioned above.
1. _______________________________ 2. ________________________________
3. _______________________________ 4. ________________________________
5. _______________________________ 6. ________________________________
Place:
Date: