Babara baji is the wife of Nazir A., and they live in the city of Chichawatni in Pakistan. She is the mother of two children: one daughter and one son. Her daughter is 4 years old, and her son is 1 years old. Her husband is a driver, and he has been in this profession for the last 5 years. Babara baji is a housewife, and she states that she truly enjoys house-related work and taking care of the children. She is applying for a loan for her husband so that he may buy his own auto-rickshaw (a local three-wheeled motor vehicle).
She is joined in her loan group by the following individuals: (1) Asia baji, who seeks a loan to buy animals to resell; (2) Razia baji and (3) Bushra baji, both of whom request loans to expand their scrap businesses; and (4) Najma baji, who is in need of a loan to expand her fruit business.
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.