Ghazala baji is the widow of N. A. and lives in a city named Lahore, Pakistan. Lahore city is famous for its historical places. She has been living in this city for the last 25 years. She is the mother of two sons. Her elder son has a donkey cart which he uses for loading. Her younger son is a daily wage laborer. Ghazala baji has a business of selling milk. She has a buffalo at her house and she gets milk from her and sells it in a milk shop. She successfully repaid her two loans from Asasah (a microfinance institute of Pakistan). Now she is applying for a loan to buy another donkey cart for her son.
She is joined in her loan group by a few more members. Shukria baji wants a loan to buy tools to repair air coolers. Razia baji and Nazia baji wants a loan to buy materials (beads, sketches and clothes) for her decorative embroidery business. Kiran baji wants a loan to buy plastic to make plastic frames. Razia baji wants a loan to buy groceries for 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.