The 'Joint Liability Group' (JLG) model is a predominant lending methodology for MFIs in India. Which of the following best describes the operational mechanism of a JLG used to mitigate credit risk in the absence of tangible collateral?

Question

Economics · Economy

Verified Solution4 OptionsUpdated: October 2026👁️1 View

Share:

Correct answer

The group provides a social guarantee where members are collectively responsible for the repayment of loans taken by individual members.

Save this question and verified answer as a clean study sheet with live clickable link.

👥

Challenge your peer aspirants on WhatsApp or Telegram to solve this question!

Online Test Series

Practice full-length mock tests with real exam timers, instant score analysis, and all-India ranking.

Chapter Practice

Want more practice questions on Economy?

Solve complete topic-wise tests with detailed solutions on GkGet.

Recommended practice questions in Economics · Economy

Which of the following territories was annexed by Lord Dalhousie under the pretext of misgovernance, and not directly through the Doctrine of Lapse?

What was the primary stated reason for the Partition of Bengal in 1905 by Lord Curzon?

Which of the following events is considered the immediate trigger for the launch of the Non-Cooperation Movement by Mahatma Gandhi?

Answer 1

Only the group leader is eligible for a loan, and they distribute the funds to other members at their discretion.

Answer 2

The MFI takes a life insurance policy for the group leader, and the premium is shared by all members.

Answer 3

The group provides a social guarantee where members are collectively responsible for the repayment of loans taken by individual members.

Answer 4

Every member of the group must pledge their individual land records to the MFI as a secondary security.

Related Practice Questions