Naeem B., wife of M., lives in a small city named Arifwala in Pakistan. She owns a two room brick house. She is a mother of one daughter, who is 13 years old, named Saima Parvez. Saima is in the 4th standard grade and wants to be a teacher. Naseem and her husband Parvez want to fulfill their daughter’s wish. Her husband is a fruit seller. He has been in this profession for the last 20 years. Naeem successfully completed her frist loan from Asasah, a microfinance institute in Pakistan. She applies for this loan for her husband’s fruit business.
She has been joined in her group by a few more members. Kalsoom B. wants a loan for her cosmetic business. Safia B. wants a loan for her husband’s shoe business. Zahida B. wants a loan for repairing her husband’s auto-rickshaw. Bilquis B. wants a loan for her shoe business.
This is a group loan. The loan funds will be distributed among the group members, each of whom will invest in her 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.