Credit to individuals based on group liability RMGs give aid only to groups
ELURU: A. L. Nageswara Rao, Andhra Bank General Manager and Convener of the State Level Bankers Committee (SLBC), on Monday said bankers were contemplating provision of bank-linked finance to tenant farmers through Joint Liability Groups (JLGs) as a substitute for the existing Rytu Mitra groups.
Addressing a press conference here, Mr Rao said the spirit behind the JLG concept was to support tenant farmers who were deprived of financial help from public institutions all these days. He underlined the need to build the JLGs with exclusive representation of tenant farmers for linkage of bank-linked finance in line with the guidelines framed. Rytu Mitra groups were formed with tenant farmers, small and middle farmers together as members with group dynamics and thrift activity as lifeline.
The SLBC Convener said flow of bank-linked finance through a mixed bag like RMGs would mean defeating the very objective behind the policy initiative of the Government providing tenant farmers access to finance. He said the JLGs would only have group dynamics but not saving activity as in the case of RMGs. The JLGs intended to help tenant farmers secure a credit ranging up to Rs 50,000 based on the `group liability' without having to produce any certificate from landowners, he added. RMGs facilitated only group loaning while the JLGs intended to facilitate credit flow to individual members in the groups and the groups as a whole. Mr Rao, however, evaded a direct reply on the fate of the RMGs that had been strenuously built by the State Government all over the State since 2003.
The Government's concept of providing tenant farmers access to bank credit had suffered a jolt.