Rehana baji is the wife of S. and lives in a small area named Bund Road of City Lahore, Pakistan. She owes a two-room brick house and has been living in it for the last 16 years. She is the mother of six children: five daughters and one son. All of her daughters are married. Her son makes belts and sells them in a market. Rehana baji’s husband works in a factory. Rehana baji herself has a clothes-selling business. She buys clothes from a city named Faisal Abad. Faisal Abad city is famous for its clothes. She has been selling clothes for the last 5 years. She is applying for a loan to buy more clothes to resell.
She is joined in her loan group by a few more members. Rubina baji wants a loan to buy seasonal vegetables to resell. Naseem baji wants a loan to buy a sewing machine to sew clothes. Nusrat baji wants a loan to buy more garments to resell. Nasreen baji wants a loan to expand her paint-selling business.
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.