Parveen baji, the wife of A. R., lives in an area of Lahore, Pakistan named Ismail Nagar. Concentrating on household work, she has resided in her seven room brick house for the last 35 years, raising eight children: seven sons and one daughter. Her eldest son operates his own clinic, while the next eldest works in a factory. Four other sons make artificial jewelry sets that they sell in the market, while her youngest son is in 6th standard and her daughter is in 9th standard. Parveen baji's husband is unemployed.
Parveen baji fully repaid her three previous loans from Asasah (a microfinance institution of Pakistan) and is now requesting a loan to buy material (beads, wires, tools) for her sons’ jewelry-making business.
She is joined in her loan group by four other members: Farhat baji wants a loan to buy seasonal fruits to resell; Nargis baji wishes to buy livestock (goats) for her meat business; Razia baji wants to purchase material (beams, rope) for her shuttering business, while Ruqaiya baji wants a loan to repair her auto-rickshaw (a local three-wheeled motor vehicle).
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.