Joint Liability Group to finance small farmers: NABARD

Rural development agency NABARD is to roll out a new concept called Joint  Liability Group (JLG) to provide institutional credit to small farmers like share croppers, oral lessees and agricultural labourers.

Conceived on the pattern of Self Help Groups (SHG), NABARD will provide refinance facility to banks for providing lending to small and marginal farmers who are normally deprived of finance.

"We are focusing on a new concept called Joint Liability Group on the concept of SHGs. Under this, credit needs of small and marginal farmers like share croppers, oral lessees will be taken care of. A concept note in this regard has been prepared and issued to banks," NABARD CMD H K Bhanwala told reporters in Chandigarh on Wednesday.

JLG is aimed at meeting the credit needs of share croppers and farm labourers who would form a group by joining together, he said.  "Efforts will be made to provide credit under oral lease wherein it will be ensured owner of land does not lose (land) rights and a lease is created and on the basis of that lease, farmers could be financed," said Bhanwala who is the youngest CMD of NABARD.  "Banks are ready to finance (under this scheme) and it is up to the state governments to see the opportunity," he said.

He said JLG scheme will be highly beneficial for states like Punjab and Haryana where average land holdings are shrinking and strength of such farmers is large in these states.

NABARD

At the instance of Government of India Reserve Bank of India (RBI), constituted a committee to review the arrangements for institutional credit for agriculture and rural development (CRAFICARD) on 30 March 1979, under the Chairmanship of Shri B.Sivaraman, former member of Planning Commission, Government of India to review the arrangements for institutional credit for agriculture and rural development. The Committee, in its interim report, submitted on 28 November 1979, felt the need for a new organisational device for providing undivided attention, forceful direction and pointed focus to the credit problems arising out of integrated rural development and recommended the formation of National Bank for Agriculture and Rural Development (NABARD). The Parliament, through Act,61 of 1981, approved the setting up of NABARD. The bank came into existence on 12 July 1982 by transferring the agricultural credit functions of RBI and refinance functions of the then Agricultural Refinance and Development Corporation (ARDC). NABARD was dedicated to the service of the nation by the late Prime Minister Smt. Indira Gandhi on 05 November 1982.

NABARD was set up with an initial capital of  100 crore. Consequent to the revision in the composition of share capital between Government of India and RBI, the paid up capital as on 31 March 2013, stood at  4000 crore with Government of India holding  3,980 crore (99.50%) and Reserve Bank of India 20.00 crore (0.50%).