Compare JLGs and SHGs

Compare JLGs and SHGs

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Following are the major differences between the JLG or the Joint Liability Group and the SHG or, the Self Help Group

• As opposed to JLGs, SHGs are units that are focused on the communities. SHGs are owned and controlled by members, who also establish all of the rules governing how the organisation will operate. These organisations receive assistance from banks and NGOs in order for them to succeed.

• Internal control exists in SHGs, but this can cause friction amongst members. The organisations that support JGs exercise external influence over them. The promotional institution also establishes the JLG's terms and conditions. When opposed to SHGs, JLG functions are more conventional and simpler to duplicate.

• In a SHG, the group members must save money before they can apply for a loan. In a JLG model, groups are not required to save money in order to engage in interloaning. Most of the times, MFIs initiate the development of JLGs by inviting members to form such groups with the aim of securing a loan.

• Through NGOs, donor organisations assist SHGs in developing their capacities and skills. For a SHG, obtaining a bank loan takes longer as a result of the internal capacity building process and therefore, these units might find it simpler to get financing. Therefore, JLGs are known as "rapid growth models." Compared to JLGs, SHGs are more democratic and decentralised.

• SHGs are independently run and self-sufficient. As a result, an MFI representative needs to spend very little time on group administration. This indicates that numerous groups can be handled by a single representative, resulting in low cost management. Employees of the MFI are in charge of overseeing the group's regular activities under the JLG model. It is therefore a costly model.

• JLGs have superior protection from the assisting MFIs, making them more resistant to both internal and external threats. They lack the same level of potency as SHGs, though.