Kolkata: National Bank for Agriculture and Rural Development (NABARD) and State Bank of India (SBI) jointly signed a Memorandum of Understanding (MoU) with five selected NGOs of the state for promotion of around 2,500 Joint Liability Groups in Purulia, Paschim Medinipur, Purba Medinipur, Burdwan and North 24-Parganas districts of West Bengal.
The MOU was inked at the Regional Office of NABARD on January 2. On this occasion, G R Chintala, Chief General Manager of Micro Credit Innovation Department of NABARD Head Office, said that 24.5 lakh Joint Liability Groups (JLG) have been credit linked by the banks throughout the country, of which 7.02 lakh JLGs were financed during 2016-17. He also emphasised that the public sector banks like SBI need to play a major role in future.
The MoU intends to support the promotion of quality JLGs, which can be considered for financing in a hassle-free manner by SBI under agriculture and allied sector through 5 years KCC for seasonal crop cultivation, term loans or allied activities. This mode of financing would minimise the risks in the loan portfolio for the SBI.
Speaking at the programme, A K Raybarman, CGM, NABARD, highlighted the plight of tenant farmers and share croppers in many parts of the state due to the denial of access to institutional credit, disaster relief and other support services due to the lack of title to land. A pilot project was initiated by NABARD in 2004-05 in 8 states, with the support of 13 RRBs to address the problems of actual tillers of land by introducing the concept of financing them in JLG mode.
The scheme was later mainstreamed for the banking system during 2006-07. However, the product needs further nurturing and NABARD has been partnering with various JLG-Promoting Institutions (JLGPIs) to facilitate the promotion of quality JLGs which can then be supported by different financial institutions. For 2017-18, NABARD has fixed a target of 80,000 JLGs to be credit linked in West Bengal. Over the years, NABARD has sanctioned assistance for promotion of 60,000 JLGs by various NGOs in the state, through 339 projects in different districts.
S C Murmu, Regional Director, RBI, expressed his happiness over the historic occasion and opined that the innovative nature of the social collateral, used under JLG mode of financing, will help in achieving the goal of 100 per cent coverage of the tenant farmers of the state under institutional finance in the shortest possible time.
Partha Pratim Sengupta, CGM, SBI, along with other senior officials of SBI and NABARD were also present at the programme, along with the representatives of the five NGOs involved in the promotion of JLG.