Haleema B., 49, the wife of A. A., 50, lives in Arifwala, Pakistan, where she owns a two room brick house and is the mother of two children. Her husband has been operating a cycle-renting business for the last three years, and she is now seeking a loan for the business to enable him to increase his income and improve the financial condition of his house. She recently successfully completed her first loan from Asasah, a microfinance institution of Pakistan.
Haleema has been joined in her loan group by four other members: Zubaida B., who wants to buy wheat; Ghafooran B., who wants to buy fruits for her fruit business; Muniran B., who wants to buy items for her electric shop; and Razia B., who wants to expand her grocery shop.
This is a group loan. The loan funds will be distributed among the group members, each of whom will invest in her own business. The members mutually guarantee one another's loans. If one member does not repay, the other members are responsible.
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.