What is a joint liability group loan?

Joint Liability Group loan (JLG) is when an informal group of 4-10 individuals form a group to avail a bank either individually or collectively. The decision to form a group should be mutual and every member should take part in similar types of economic activities.

What is the maximum loan amount in JLG?

For individuals: Rs. 1 lakh.For groups: Rs. 10 lakhs.

What kind of collateral is required for the JLG loan?

There is no such requirement asked by a bank to a JLG.

Which member in JLG group is liable for repaying the JLG loan?

Each member is liable to repay the JLG loan scheme.

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Joint Liability Group Loan

Benefits
Features
Eligibility Criteria
Document Required
Fees & Charges
Most Important Terms & Conditions (MITC)

Joint Liability Group Loan : Benefits

No collateral and margin is required for loans up to Rs 10.00 Lakhs
Nil Pre-payment Charges

Joint Liability Group Loan : Features

4-10 individuals coming together for the purpose of availing bank loan on individual basis or through group mechanism against mutual guarantee.
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.
The JLG should hold regular meetings under effective leader of group to discuss issues of mutual interests.

Joint Liability Group Loan : Eligibility Criteria

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. The groups should 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.

Joint Liability Group Loan : Document Required

KYC Documents (AADHAR, Voter ID, PAN Card, Driving License etc.)
Passport Size photo
Letter of Sponsorship from the Sponsoring agency.
JLG Membership Form
Loan Application Form
Mutual Liability Agreement

Joint Liability Group Loan : Fees & Charges

No loan Processing fee/ Documentation Charges/inspection charges will be levied if the per member exposure is up to Rs. 25,000/-.

Joint Liability Group Loan : Most Important Terms & Conditions (MITC)

Type of facility	Cash Credit/Term Loan
Quantum of Loan	Maximum Loan for Individual: Rs 1.00 Lakh Maximum Loan to JLG: Rs 10.00 Lakhs
Rate of Interest	Limit upto Rs 3.00 Lakhs: One year MCLR+SP Limit above Rs 3.00 Lakhs: One year MCLR+SP+1.00%
Pre- payment and foreclosure	No prepayment penalty and foreclosure charges applicable
Security	Mutual Liability of all members
Repayment	Monthly

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What is a joint liability group loan?

Joint Liability Group loan (JLG) is when an informal group of 4-10 individuals form a group to avail a bank either individually or collectively. The decision to form a group should be mutual and every member should take part in similar types of economic activities.
What is the maximum loan amount in JLG?

For individuals: Rs. 1 lakh. For groups: Rs. 10 lakhs.
What kind of collateral is required for the JLG loan?

There is no such requirement asked by a bank to a JLG.
Which member in JLG group is liable for repaying the JLG loan?

Each member is liable to repay the JLG loan scheme.