Group formation Introduction

Dhanshristi Joint Liability Group (JLG), Street Hawkers Group & farmers Group is an informal group of 4 to 5 individuals women who pool their resources to obtain loans, typically from banks or other financial institutions, for income-generating activities. Groups are particularly useful for individuals, such as small farmers or those with limited access to traditional financing, who may not qualify for individual loans due to lack of collateral or credit history. The group members jointly guarantee each other's loans, fostering mutual support and responsibility. 
 

Here's a more detailed explanation:
Key Features of Groups:
 

Formation:
Groups are formed by individuals with similar socio-economic backgrounds and engaged in comparable economic activities. 
Purpose:
The primary purpose is to collectively access credit for various income-generating activities, such as agriculture, animal husbandry, or small businesses. 
Joint Liability:
Each member is responsible for the repayment of the entire loan, not just their individual portion, creating a system of mutual guarantee and peer pressure. 
Reduced Risk for Lenders:
Groups reduce lending risk for financial institutions as the group's collective responsibility ensures higher repayment rates. 
Increased Access to Finance:
Groups provide a pathway for individuals who might otherwise be excluded from formal financial systems due to lack of collateral or credit history. 
Financial Inclusion:
Groups play a crucial role in promoting financial inclusion by extending credit to marginalized communities and fostering economic empowerment. 
Examples:
Groups can be formed for activities like crop production, tailoring, catering, and various other income-generating ventures. 
 

In essence, Groups are a powerful tool for financial inclusion and economic development, particularly in rural and underserved areas.