Paz, Lorenzo and Angélica live in the community of Mesón de Ixtlahuac in Malinaltepec, a highly marginalized area located in the state of Guerrero. As many others, Paz, Lorenzo and Angélica have inherited the trade of harvesting coffee, which can only generate income once a year. Paz, (anticipating the lack of income for the rest of the year) has invested some money in farm animals, which she sells in the nearest towns. As well as doing this, she joins Lorenzo and Angélica to work on other lands, but she receives less than $6 USD for a day's work. In the community of "El Mesón," people like Paz have access to electricity but it rarely works properly. Because the service is insufficient, they are forced to use candles for lighting purposes. This alternative source is expensive and does not allow people like Paz to do their productive activities once the sun has set. By purchasing a solar home system, Paz will be able to carry out her activities and save a considerable amount of money.
IluMexico is a hybrid social enterprise that provides clean energy via solar-powered home systems in off-grid communities in Mexico. Kiva loans enable low-income households to purchase these systems. By lending to borrower groups that cross-guarantee each other, IluMexico is able to reach far more borrowers who do not have the collateral or credit history to get a loan from a formal financial institution.
This Kiva loan will be used to provide borrowers with needed goods or services, as opposed to cash or financial credit.
IluMexico joined Kiva through our Experimental Partnership Program, and has therefore received a lighter level of due diligence. Accordingly, loans associated with this partner carry a higher level of risk than typical Kiva loans.
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.