Nusrat baji is the wife of A. N., and she has lived in the city of Chichawatni in Pakistan for the last 20 years. She owns a two-room brick house, and she is the mother of five children: four daughters and one son. Her oldest daughter is married, and her next oldest daughter completed her education though the 8th standard (grade) level. She has already successfully repaid two loans from Asasah (a microfinance institute of Pakistan), and she is now applying for a loan for her husband. More specifically, A. N. has a business of buying and selling motorbikes, so he is seeking to expand his business by purchasing another motorbike.
She is joined in her loan group by the following individuals: (1) Zubaida baji, who seeks a loan to expand her food business; (2) Parveen baji, who requests a loan to buy a sewing machine; (3) Nasreen baji, who is in need of a loan to expand her paint business; and (4) Sugran baji, who would like a loan to buy, grow, and sell wheat.
This is a group loan. As such, the loan proceeds will be distributed among the group members, each of whom will invest in her own business. Further, the members mutually guarantee each other's loans; therefore, if one member does not repay her loan, the other members are responsible for the arrears.
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.