JLG Default Contagion refers to the possibility that stress in one Joint Liability Group member spreads to others. In group-based lending, members may share social ties, common geography, similar occupation, or mutual repayment responsibility. If one member defaults, others may lose willingness or capacity to repay, especially when the group faces the same local shock such as crop failure, market closure, or customer default. For example, a small vendor group in one market may experience simultaneous repayment stress after a prolonged business disruption. This risk matters because portfolio loss can increase quickly in clustered exposures. The common caution is to monitor group concentration, member independence, repayment discipline, and local events instead of assessing each borrower in isolation only.