Max United Foundation

MAX UNITED MODEL MICROFINANCE

Max United are equipped with JLG Model Microfinance. This is a simple model of microfinance. Joint Liability Group is a concept established in India in 2014 by the rural development agency - National Bank for Agriculture and Rural Development- (NABARD) to provide institutional credit to small farmers.

Microfinance programs have given many of the world's poorest people the opportunity to lift themselves from their poverty altogether. The increase in household income allowsthe family of Women beneficiaries to provide greater quantities and more nutritious food to their families, to educate their children and to improve their houses.As families cross the poverty line and micro-businesses expand, their communities benefit. Jobs are being created, knowledge is shared, civic participation increases, and women are recognized as valuable members of their families and communities. In short women are respected and they become an integral part of both families and society.

Max United stands for the ‘wholistic’ empowerment of the poor and marginalized. Through the constant intervention with the society, we realized that the women socio economic empowerment of women is highly resulted on the process of poverty alleviation and through the same the families in the target group can achieve employment opportunities and via Financial Self-reliance. Among the villagers an earning male spends 25-40% of his income for himself but the women are bringing 95%-100% of their income to their respective family.

What is JLGs?

“A Joint Liability Group (JLG) is an informal group comprising of 4-10 individuals of same village/locality of homogenous nature and the same socio economic background who mutually come together to form a group for the purpose of availing bank / mfi loan without any collateral on individual basis or through group mechanism against mutual guarantee. “

General features of JLG

A Joint Liability Group (JLG) is an informal group comprising of 4-10 individuals coming together for the purpose of availing bank loan on individual basis or through group mechanism against mutual guarantee. Generally, the members of a JLG would engage in a similar type of economic activity in the Agriculture and Allied Sector. The members would offer a joint undertaking to the bank that enables them to avail loans. JLG members are expected to provide support to each other in carrying out occupational and social activities.

Specific features of JLGs

Members should have a common activity.
Members need not to have a land title.
Members should be of the same village.
Only One member of a family can become a member of JLGs.
Members should not be a defaulter of bank loan.
Member should hold regular meetings.

Criteria for Membership

Members should belong to similar socio-economic status, background and environment carrying out farming and Allied activities and who agree to function as a joint liability group. This way the groups would be homogeneous and organized by likeminded farmers/Individuals and develop mutual trust and respect.

The members should be residing in the same village / area / neighborhood and should know and trust each other well enough to take up joint liability for group/ individual Loans. Members who have defaulted to any other formal financial Institution, in the past, are debarred from the Group Membership. More than one person from the same family should not be included in the same JLG.

Group Approach

All members of the JLG should be active enough to assume leadership of the group to ensure the activities of the JLG. The selection of an effective / able / active leader for the JLG is essential as this will ultimately benefit all the JLG members. The leader fosters a sense of unity, oversees and maintains discipline, shares information and facilitates repayments. For the bank, he is the focal point for group activities.

The JLG should hold regular meetings which must be attended by all the members regularly to discuss issues of mutual interests.

Graphical Representation of JLG Hierarchy

Methodology for Microfinance Loan

A group is consisting of 5-7 members will form a JLG. The group formation will be done after a series of meeting with the people in their area. The first step is to contact the local leaders of the area to communicate about the program. Once they understood the concept, we do the criteria survey.

The loan officer will make house to house visits and ensure that the identified persons are fulfilling the norms laid out under JLG concept. The Loan Officer also makes it sure that the candidate is not a member of other S.H.Gs/JLGs or any other groups such as promoted by similar organizations. The identified members will be given an initial awareness on the JLG concept and its significance to enable the candidate to take a firsthand decision to proceed further or to withdraw or to postpone joining the JLG.......

Loan Procedure

For taking a loan from Max United the members should request the same to the JLG and if it is a genuine case the JLG will allow the member to get the loan application form from Loan Officer.....