Growth Analysis of Joint Liability Groups (JLGs) in India - With Special Reference to Tamil Nadu

Abstract

Joint Liability Groups (JLGs) has been a noteworthy developmental mechanism in microfinance group-lending model advancing towards uplifting materialistic collateral-less and unbanked poor society in the direction of self-sustainability through easing access to formal financial services with a proposal for self-employment which remained to be pursued as their dream for so long. The present study seeks to document expansionary trend in JLGs and to identify major benefits, constraints and suggestions of JLG member-beneficiaries with purview of supporting further development towards promoting and financing more JLGs in India.
 Aim: The present study attempts to document the trend in growth of JLGs supported by National Bank for Agriculture and Rural Development (NABARD) in India and to identify major benefits, constraints and suggestions in functioning of JLGs through Bank-Business Corporate (BC) linkage model among its member-beneficiaries which would serve researchers and policy makers to arrive at appropriate measures to expedite advancement in expansion and magnification of trend of JLGs in India.
 Design of Study: The study employed secondary data from annual publication of NABARD “Status of Micro Finance in India” for 2011-12 to 2019-20 for JLG trend analysis. Following purposive sampling, 3 blocks of Namakkal district were studied during August 2021, purposively selecting Bank-Business Corporate (BC) linkage model and randomly selecting well-experienced 30 member-beneficiary groups.
 Methodology: The study adopted Compound Annual Growth Rate (CAGR) for JLG trend analysis and Garrett’s ranking procedure to prioritize major benefits, constraints and suggestions of JLG members.
 Findings:
 
 Overall growth rate of India stands at 44.86% in terms of number of JLGs promoted and 60.73% in terms of quantum of JLG loan disbursed. Northern region excels growing at the rate of 62.53% in the former category while Western region exhibits expeditious rate of growth (75.19%) in the latter.
 Tamil Nadu leads the lane in terms of cumulative quantum of credit disbursed ranking second to Bihar in terms of cumulative number of JLGs promoted in India. Orissa manifests rapid growth among leading five states in both categories cumulatively.
 
 With women empowerment socially and economically, easy access to formal credit and better repayment as major benefits of JLG participation, hiking initial loan amount, aiding in identification of microenterprise, training and capacity building in related fields, introducing technological innovation on demand-side and linkage to product marketing and brand promotion on supply side were suggested areas of concern towards encouraging massive promotion of JLGs..