Asia baji is a wife of M. and lives in a city named Borewala, Pakistan. She has a two room brick house where she has lived for the last year. She is the mother of two sons. Her husband has a milk shop and has been in this profession for the last 2 years. She successfully completed her two loans from Asasah (a microfinance institute of Pakistan). Now she is applying for a loan to buy more milk for her husband’s milk shop.
She is joined in her loan group by a few more members: Saleema baji wants a loan to buy more meat for her meat shop; Noshaba baji wants a loan to buy more cloth for her cloth business; Rashidan baji wants a loan to buy a sewing machine and thread for her sewing shop; and Siddiqan baji wants a loan to expand her grocery shop.
This is a group loan. The loan funds will be distributed among the group 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.