Zakia baji is the wife of R. A. and has lived in a two-room brick house in Kot Radha Kishan, Pakistan for the last 10 years. She has three daughters and one son, all of whom are enrolled in a local school. Zakia baji sews clothes and does domestic chores for a living. Her husband runs a grocery store. She has successfully paid back three loans from Asasah (a microfinance institute in Pakistan) and is now applying for a fourth loan to buy more inventory for her husband’s shop.
She is applying for her loan with several other people. Salma baji wants a loan to buy more materials for her wood business. Bushra baji wants a loan to buy more tents for her tent-service business. Rubina baji and Tahira baji want a loan to buy more fruit for their fruit-selling businesses.
This is a group loan. The funds will be distributed among the members, each of whom will invest in her own 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.