Shakoora Baji, the wife of N. M., lives in a small area named Bund Road of Lahore, Pakistan. She owes a two-room brick house and has been living in it for the last 25 years. She is the mother of one son. Her son is one year old and his name is Hanka. Shakoora Baji's husband has a fruit selling business. He has been in this business for the last 10 years. Shakooran Baji is a housewife and prefers to do household work and take care of her family. She is applying for a loan to buy more seasonal fruits for her husband's fruit selling business.
She is joined in her loan group by a few more members. Bushra Baji wants a loan to buy more clothes to resell. Syeda Baji wants a loan to buy plumbing supplies (taps, pipes) to resell. Shahnaz Baji wants a loan to buy more seasonal fruits to resell. Bushra Baji wants a loan to buy more clothes to resell.
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.