Parveen baji is the wife of M. A.. ( Baji is an Urdu term meaning 'elder sister'.) They have been married for the last 30 years. The couple has five children; two sons and three daughters. She is a housewife and prefers to stay at home. Her husband is a salesman and sells sewing machines in various locations. Parveen is applying for a loan so her husband can expand his business.
She has three women in her loan group. Ramazan baji wants a loan to buy vehicle tires; Razia baji would like money to expand her paint shop and Asia baji wants a loan to increase the amount of clothes she can sell.
The loan 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.