Self Help Groups (SHG)
- Group is the borrowing unit
- Savings at SHG level
- Power of Attorney to 2-3 members to sign for SHG
- Group size (10-20)
- SHG is liable for member default
Joint Liability Group (JLG)
- JLG groups of 4-9 members
- Loans directly to members
- No processing fees for loans
< Rs.25,000 - Individual members sign all documents
- JLG group gives mutual guarantee for members default
Credit Insurance
- Member and Spouse covered to the extent of loan amount
- Spouse Insurance optional
- On Member's death, the loan account will be closed and the balance amount transferred to nominees account directly
- On nominee's death, the full insurance amount is given to member to recoup from the loss
Savings Account
- Group Savings and Individual Savings account facility is provided
- M-ATM facility is provided by some Banks to enable withdrawals
- Loan EMI adjustment options available to members
| Product offered | Joint Liability Group | Self Help Group loans |
|---|---|---|
| Loan amounts | Rs. 10,000 to Rs. 35,000 | Rs. 10,000 to Rs. 35,000 |
| Collections Frequency | Monthly Collections | Monthly Collections |
| Tenure | 18 months to 24 months | 18 months to 24 months |
| Interest rate (diminishing balance) | 24% to 26% | 24% to 26% |
| Processing Fees | 1% For loan above Rs. 25,000/- | 1% For loan above Rs. 25,000/- |
| * No processing fees charged for IDBI Bank Loans | ||