Bhubaneswar: The state government Friday issued guidelines to provide crop loans to landless cultivators, sharecroppers and small and marginal farmers by forming Joint Liability Groups (JLGs).
A few days ago, the state government decided to broadbase the rural credit coverage and provide institutional credit to the landless cultivators, sharecroppers and small and marginal farmers through JLG.
Chief Minister Naveen Patnaik will launch the statewide ‘cooperatives at your doorstep’ campaign May 29, which will continue till July. During the campaign, the primary agricultural cooperative societies (PACSs) have to organize at least 10 JLGs and provide them the required financial assistance in the form of loans.
As per the guidelines issued by Cooperation Secretary Ranjana Chopra in this regard, a JLG is an informal group comprising 4-10 individuals coming together for the purpose of availing bank loan against mutual guarantee. The members would offer a joint liability agreement to the PACS to enable them to avail loans.
The government has made it mandatory for PACS to form at least 10 such groups and extend loan at one per cent interest up to Rs 50,000 each.
To become a member of the group, the concern framer has to be enrolled in the PACS. The members of a JLG should belong to similar socio-economic status and should agree to function as a group. The members of one group should be residing in the same village or area and should know and trust each other well enough to take up JLG or individual loans. “Members who have defaulted to any other formal financial institution and continuing as defaulters will not be allowed to become a member of the group. More than one person from the same family cannot be included in the same JLG,” said Chopra.
A member of the group should be selected by the members unanimously as the group leader and the leader will facilitate repayments. The JLGs through peer pressure ensure loan utilisation and timely repayment. Otherwise, all members will be liable in case of default, the guidelines said.
The cooperative officials asked to continuously monitor and supervise the activities of the JLGs including organization, credit linkage, recovery, capacity building etc. The government would also provide incentive of Rs 2000 for promotion of a JLG. The CCB has to enter into tripartite agreement with NABARD to function as Joint Liability Group Promoting Institutions (JLPI). The incentive will be released in three installments.
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