Monica, a single mother in her mid-thirties, is a member of Kitwe Women’s group. Her main business is hawking used ladies' clothing around town and deep in villages. Monica claims to have done this business for the last three years, but has faced lots of challenges including dividing time between her family and business, walking for long distances under stressful weather conditions, renting a home, and daily payment of the local hawkers' tax.
Monica has a plan of growing her business to a level that would enable her to rent a shop in town where her customers would find her and at the same time looking after her children who always come back from school to a home without a mother since she has to be away working. She has now applied for a loan of UGX 200,000 through the group to boost her business.
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.