NABARD signs MoU with Punjab National Bank (PNB) to finance 1000 Joint Liability Groups (JLGs)
The National Bank for Agriculture and Rural Development (NABARD) has signed a Memorandum of Understanding (MoU) with Punjab National Bank (PNB) to provide financing support to 1,000 Joint Liability Groups (JLGs). The aim is to improve access to formal, collateral-free credit for small farmers, tenant farmers, and micro-entrepreneurs.
Joint Liability Groups (JLGs) are small groups of people who come together to take loans from banks without providing collateral, where each member is jointly responsible for repaying the loan. A JLG usually consists of 4 to 10 members, mostly small farmers, tenant farmers, sharecroppers, or micro-entrepreneurs. The group applies for loans either individually or as a group, but all members guarantee each other’s repayment.
Under this partnership, special focus will be given to members of well-performing Self-Help Groups (SHGs), who will be encouraged to move into JLGs. This will help disciplined borrowers get higher loan amounts for their individual livelihood and business activities.
The initiative is aligned with the Lakhpati Didi programme and seeks to promote women-led entrepreneurship, especially in rural non-farm sectors. NABARD will support the programme through developmental assistance, grants, and technology-based solutions to make rural credit delivery more efficient.
