Joint Liability Groups (JLGs) – The Saviors of Urban Poor

Abstract

According to the latest research done by the World Bank, India is home to almost one third of the world’s poor (surviving on an equivalent of one dollar a day). Though many central government and state government poverty alleviation programs are currently active in India, microfinance plays a major contributor to financial inclusion. In the past few decades it has helped out remarkably in eradicating poverty. Reports show that people who have taken microfinance have been able to increase their income and hence the standard of living. Microfinance is not just about giving micro credit to the poor rather it is an economic development tool whose objective is to assist poor to work their way out of poverty. It covers a wide range of services like credit, savings, insurance, remittance and also non-financial services like training, counseling etc. Microfinance institutions serve as a supplement to banks and in some sense a better one too. The main two forms of group-based credit are Self-Help Group (SHG) & Joint Liability Group (JLG).This paper discusses all about the Joint Liability Groups.