October 7, 2026 · Guides

JLG and SHG Group Lending Software

JLG loan software has to do one thing well: treat a group as a group, not as twelve unrelated borrowers. If your clerks still keep a centre sheet on paper and then re-type it into the system at night, this post will show you what the software should do instead.

In this guide

What group lending software is
How to use it
How it helps the business
Common mistakes
What to check in a demo
Related reading
FAQs

What group lending software is

A joint liability group (JLG) is a small set of borrowers who stand behind each other’s repayment. A self-help group (SHG) is a group that saves together, and its members borrow through it. Both are usually collected at a regular centre meeting, often weekly, led by a field officer. Software for this keeps the group, the centre and the loan linked, so you can see a single borrower’s balance and the whole group’s position together.

It is one part of a larger system. For the full picture, read the microfinance software buyer’s guide and the loan software buyer’s guide. Our microfinance software page lists group lending and centre meeting support among its features.

How to use it

The steps below are how a branch normally runs it. Your screens may differ, so treat this as the flow to look for.

The branch manager creates the centre and the groups under it, and assigns a field officer.
Members are added to a group with their KYC details, so each person has her own account.
Loans are sanctioned for each member, and the disbursement is recorded group-wise or member-wise, as your policy needs.
The system builds the repayment schedule, so the next meeting date shows the amount due per member.
On meeting day, the officer opens the centre, marks each member as paid, part paid or absent, and posts the total.
At day end, the branch manager matches the cash handed in against the centre totals before closing.

How it helps the business

The gain shows up in small places. Collection posts the same day, so the morning report is not a day behind. An absent member is visible at once, and the group’s pressure to cover her share can be recorded rather than remembered. The officer carries one list instead of twelve slips.

The number to watch is the overdue amount by centre, week by week. If one centre keeps slipping, you see it in the second week, not at month end. A second figure worth tracking is the gap between cash collected and cash deposited, since that is where field leakage and honest mistakes both show up. Where daily deposits are collected the same way, see daily collection and pigmy deposit software.

Common mistakes

Treating a group loan as one big loan to the group, and losing the member-wise balance.
Letting officers post collections a week late, which makes overdue figures meaningless.
Giving every user the same rights, so anyone can reverse an entry.
Skipping the group-versus-individual tag, then finding the reports cannot separate them.
Setting the schedule without a holiday calendar, so meetings land on closed days.

What to check in a demo

Ask to see	What a good answer looks like
Create a centre and two groups	Done in minutes, with an officer assigned
A meeting with one absent member	Her dues stay open, the rest post cleanly
Member-wise and group-wise views	Both come from the same data
Posting from the field app	The branch sees it without re-entry
An overdue report by centre	Sorted by centre, officer and age of dues

Run your own centre sheet through it. The field collection app post explains the officer’s side, and KYC, credit bureau and reports covers what happens before the loan is given.

Want to see this working on your own data? See the microfinance software, ask for a live demo on +91 93117 95484, or write to mail@taxhint.in.

FAQs

What is the difference between JLG and SHG lending?

In a JLG, a small group of borrowers guarantee each other, and the lender gives loans to the members. An SHG is a self-help group that saves together and often lends internally before it borrows from a bank or MFI. Software should let you tag which type a group is.

Does the software need to handle centre meetings?

If you collect at meetings, yes. The agent should see the whole centre on one screen and post every member’s payment together.

Can an individual loan sit in the same system as a group loan?

It should. Ask the vendor to show a group member and a walk-in borrower in the same ledger, with the same reports.

Who decides the loan rules for a group?

Your own policy and the law that governs you decide that, not the software. Check the current RBI directions or your co-operative law with your CA, then set the rules in the system.