Joint Liability Group Loan - Eligibility, Documents, Benefits And Best Options

Dec 22, 2022

8 min. Read


Authored By: L&T Finance

Joint Liability Group Loan - Eligibility, Documents, Benefits And Best OptionsMicro Loan

Joint Liability Group Loan- Eligibility, Documents, Benefits, and Best Options

Availing of loans to achieve your dream is easier than ever. Most lenders provide instant loans to those having a good credit score without any collateral. There is a group of people, however, who needs a loan to improve their economic standard but do not have access due to having any credit score and proper information. These groups can comprise small farmers working on rented land, self-help groups, and women who have a source of income and plan to increase their revenue.

To further strengthen their stand in the business world and extend the benefits to these unorganized groups, a Joint Liability Group (JLG) Loan is put in shape to provide micro-loans. A JLG loan is designed for those groups who want to grow their income by scaling but fail to do so mainly due to the lack of funds or awareness. A JLG loan is given to less fortunate rural or semi-urban people who find it convenient to avail of a loan in a group of closely known people.

Features of a JLG Loan

Joint Liability Group (JLG) Loan interest rate starts from 24% onwards with a repayment tenure of 24 months to 36 months. A JLG can avail of a collateral-free loan of 35, 000 to 1,10,000 with a minimum processing fee of 1% of the total loan amount. An important detail to keep in mind is that a GST of 18% is applicable on a JLG loan, similar to any other banking service. These loans are usually offered to women customers.

Another important joint liability group loan meaning is that the only collateral is the mutual one. To put it simply, banks offer a JLG loan on the moral security of the group. The features like small loan tenure and low processing charges of a joint liability group loan aim to build a sustainable growth environment. They ensure that no dream, however big or small, is left unrealized due to the lack of accessibility to funds.

Eligibility for a Joint Liability Group (JLG) Loan

The primary joint liability group loan eligibility is an informal group of people, preferably 4-10, engaged in economic activities. The members of a group are usually well acquainted with each other and live in close proximity. For example, a Self-Help Group (SHG), or small group of farmers, or women entrepreneurs from low-income groups falling in the age group of 20 to 60 years.

Documents Required

Often, loan disbursal is a lengthy process with a lot of paperwork. The requirement of Joint Liability Group Loan documents is quite simple. The primary requirement remains the income proof of all the applicants. This is necessary to assess the loan amount that could be disbursed without risking a bank’s position as a lender.

The other documents required for a JLG loan are the applicant’s Aadhaar Card, Voter's ID card/Ration Card, or MGNREGA (Mahatma Gandhi National Rural Employment Guarantee Act) Card (if applicable).

How to Apply for a JLG Loan

You can reach out to any private, public banking, or non-banking finance corporations (NBFCs) to apply for a JLG loan. Generally, a Joint Liability Group Loan Process is simple to achieve its objective of reaching the maximum number of people with restricted means.

You can visit the official website of L&T Finance to explore your loan options and search for ‘micro loans’. If you have understood the terms and conditions of a JLG loan and have all the required documents ready.

Advantages and Benefits of a Joint Liability Group (JLG) Loan :

You are, now, aware of what is JLG loan. Let us take a look at the joint liability group loan benefits that await you if you are looking for a loan. In line with the objective of the Joint Liability Group (JLG) Loan, it offers easy and affordable means to realize the aspirations of low-income groups. For example, a small group of women running a business making pickles and snacks want to expand their customer base but are short on funds can avail of a microloan.

The JLG loan process is easy, hassle-free, and requires no security submission. Additionally, it has zero repayment bounce charges and late payment interest. An unsaid advantage of a JLG loan is the mutual collateral where each borrower may find inspiration from each other to clear off the loan without defaulting.

What are Your Best Options to Avail of a JLG Loan

Now that you are familiar with what is joint liability group loan you should search for the best options to avail of a JLG loan. While a JLG loan is regulated by the Reserve Bank of India (RBI), its terms and conditions vary from lender to lender.

While selecting the best option to avail of a JLG loan, always read the conditions like processing fees, repayment, pre-mature closure charges, late payment charges, JLG loan documents, etc. Considering the greater good achieved by a JLG loan, L&T Finance offer one of the best-in-class microloans. To know more exciting features of LTF JLG loan, click here! click here!


The realization of every financial dream, no matter how big or small relies on two things. One is the willpower of the dreamer and the second is the access to funds to achieve it. Often, representatives of the low-income group find it difficult to become financially independent and raise their standard of living instead of having easy access to loans. A joint liability group loan is a boon to those groups who have the plan to succeed in place. A little push in the form of available cash without any collateral is the key benefit of a joint liability group (JLG) loan in contributing to the uplifting standard of living for less-fortunate people.

This article is authored by L&T Finance.

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