Hanifa baji is the widow of G. N. and the mother of a 31-year-old son. After her husband died, she worked as a maid for four years in order to educate her son until the 8th standard. Now he is running his own business. For the past 28 years Hanifa baji has resided in Arifwala, Pakistan where she has a business selling wheat and vegetables. She is now applying for a loan to buy more wheat and vegetables to expand her business.
She is joined in her loan group by a few more members:
Naseem baji wants a loan to buy chairs and a mirror for her saloon;
Kaneez baji wants to buy cooking oil, sugar and dry fruits for her sweetmeat business; Iqra baji wants a loan to buy washing powder and bleach for her laundry 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.