Betty K., the chairperson of Mwesigwa Development Group in Seeta, Uganda, is a married woman with three children attending secondary school. She also cares for her late sister’s child. For four years she has managed a business car parts from a garage next to Seeta police post. She buys the car parts from Kampala City. She works with her husband, who supports her role as a member of the lending group. In turn, Betty is happy to be part of the lending group because her business is running smoothly thanks to the help of a loan. To further develop businesses, the Mwesiga Development Group is applying for a loan of $5,000, which will be distributed amongst 24 entrepreneurs.
This is a Group Loan
In a group loan, each member of the group receives an individual loan but is part of a larger group of individuals. The group is there to provide support to the members and to provide a system of peer pressure, but groups may or may not be formally bound by a group guarantee. In cases where there is a group guarantee, members of the group are responsible for paying back the loans of their fellow group members in the case of delinquency or default.
Kiva's Field Partners typically feature one borrower from a group. The loan description, sector, and other attributes for a group loan profile are determined by the featured borrower's loan. The other members of the group are not required to use their loans for the same purpose.