Haleema baji is the wife of A. M., and she lives in an area of the city of Lahore known as Walton in Pakistan. She owns a two-room brick, which she has lived in for the last 20 years. Moreover, she is the mother of three daughters, all of whom are enrolled in a local school in her neighborhood. Haleema baji's husband is a painter by profession: he paints doors, walls of houses, and big buildings. In fact, he has been in this business for the last 15 years. Haleema baji, meanwhile, is a cook by profession, and she cooks in several houses. She is applying for a loan in order to buy tools (e.g., paint brushes and paints) for her husband's business.
She is joined in her loan group by the following group members: (1) Shamim baji, who seeks a loan to buy furniture for her clinic; (2) Parveen baji, who requests a loan to buy clothes to resell; and (3) Reeta R. baji, who is in need of a loan to buy materials (e.g., cosmetics and face polishes) for her parlor.
This is a group loan. As such, the loan funds will be distributed among the group members, each of whom will invest in her own business. Importantly, the group members mutually guarantee each other's loans; thus, if one member does not repay her portion of the loan, then 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.