Purpose – The Scheme aims at the following objectives:
a. To augment flow of credit to tenant farmer’s cultivating land either as oral lessees or sharecroppers and small farmers who do not have proper title of their land holding through formation and financing of JLGs.
b. To extent collateral free loans to target clients through JLG mechanism.
c. To build mutual trust and confidence between banks and tenant farmers.
Eligibility – The Joint Liability group should be formed preferably with 4 to 10 members to ensure the group members to offer mutual guarantee.
Purpose of Credit – The finance to JLG is expected to be a flexible credit produced addressing the credit requirement of its members including crop production, consumption, marketing and other productive purpose.
Type of Loan – The branches may consider cash credit, short term loan or term loan depending upon the purpose of loan.
Loan Limit – Considering that the loan to be granted is against the mutual guarantee offered by the group, maximum amount of loan may be restricted to Rs. 50,000/- per individual
Rate of Interest – 10%