Nabard sanctions Rs 20 lakh to ADC bank

National Bank for Agriculture and Rural Development (Nabard) has sanctioned a grant assistance of Rs 20 lakh to Ahmedabad District Cooperative Bank (ADC Bank) for a project involving formation and financing to 1000 joint liability groups (JLGs).

ADC Bank will finance these groups in the districts of Ahmedabad and Gandhinagar during the years 2011-12 and 2012-13. The assistance from Nabard is partly given at the time of sanction of loan by ADC bank to JLG and partly after prompt repayment by JLG.

ADC Bank is the second cooperative bank after Rajkot District Cooperative Bank to avail assistance for JLG financing. Nabard proposes to facilitate all the district cooperative banks in Gujarat to encourage financing to JLGs, an official statement informed.

 

JLG is an informal group comprising 4 to 10 members pursuing any individual or joint activity. The main purpose for formation of such groups is to avail loan from formal banking institutions. Nabard had launched a new banking innovation of JLGs to reach out to such farmers.

With the passage of time, the land holdings are becoming smaller and smaller, making it difficult for the banks to reach out to such increasing number of marginal farmers. Nabard has been focussing on financing through JLGs to facilitate easy availability of loans to clients such as tenant farmers, oral lessees, farmers with out proper land records, groups starting micro enterprises and individuals who find it difficult to access formal credit," said H R Dave, chief general manager, Nabard - Gujarat State Region. In Gujarat, Nabard has provided assistance of Rs 34 lakh to the Regional Rural Banks (RRBs) for financing 1700 JLGs.