Raheela baji is a wife of M.A. and lives in the Walton area of Lahore, Pakistan. She owns a two-room brick house and has been living in it for the last three years. She is the mother of four children: one son and three daughters. Her son and her elder daughter are in kindergarten. The others are too young for school. Raheela baji’s husband has a shuttering business. He has been in this business for the last 20 years. Raheela baji herself is a housewife and prefers to do household work and take care of her family. She successfully repaid her three loans from Asasah (a microfinance institute of Pakistan). Now she is applying for a loan to buy beams and rope for her husband's shuttering business.
She is joined in her loan group by three other women:.
Sabiha baji wants a loan to buy tools to repair mobile phones.
Razia baji wants a loan to buy tea and sugar for her tea stall.
Bushra baji wants a loan to buy eggs 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.