Kolkata, Jan 3 (IANS): The National Bank for Agriculture and Rural Development (Nabard) and State Bank of India (SBI) on Tuesday jointly signed an MoU with non-government organisations (NGOs) from West Bengal for financing of 2,500 Joint Liability Groups (JLGs), or informal credit group of farmers.

The agreement was with five NGOs for promotion of JLGs in Purulia, Paschim Medinipur, Purba Medinipur, Burdwan and North 24 Parganas districts of the state.

SBI's Chief General Manager, Kolkata circle, Partha Pratim Sengupta said JLGs are basically are credit groups of small and marginal farmers who do not have proper title to their farmland.

"JLGs are informal groups of 4-10 members who are engaged in similar economic activities and who are willing to jointly undertake to repay the loans taken by the group from the banks," he said, adding that he hoped the project would be scaled up in a phased manner to cover the remaining districts of the state.

Nabard's Chief General Manager, Micro Credit Innovation Department G.R. Chintala said that 24.5 lakh JLGs have been credit linked by the banks in the country and of which 7.02 lakh groups were financed during 2016-17.

On the occasion, the Reserve Bank of India's Regional Director S.C. Murmu said the innovative nature of the social collateral, used under JLG mode of financing, would help in achieving the goal of hundred per cent coverage of the tenant farmers of the state under institutional finance in the shortest possible time.

He stated that the JLG promotion requires facilitators like NGOs who would take care of the education and financial literacy needs of the farmers.

Nabard's regional Chief General Manager A.K.Raybarman said it fixed a target of 80,000 JLGs to be credit linked in West Bengal for 2017-18.