Teddy is a 56-year-old widow with six children living in Kasese, Uganda. Twenty years ago, she decided to venture into the retail business after her husband died. With the proceeds, she has been able to pay school fees for her children and buy land for farming. Like most traders, she faces a challenge of price fluctuation and high rental fees that limit her profits. Her goals are to educate her children and open an outlet in a nearby trading center. Teddy intends to use the loan to buy soap, sugar, maize, cassava flour and basins to sell. Only four of her group members applied for a loan but per group policy, all of them had to guarantee each other to access credit.
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.