Shahnaz bano baji is the wife of R. A. and resides the city of Shah Rukn, Pakistan. Shah Rukn city is famous among travelers for its holy places and tombs. Shahnaz baji completed her education till 5th standard, after which point she stopped her education as her family couldn’t afford it. She owns a two room brick house and has been living in it with her family for the past 20 years. She is the mother of three children: two sons and one daughter. Her eldest son has a power loom machine (used to make clothes) and sells clothing in the market. Her younger son and her daughter are enrolled in a local neighborhood school. Shahnaz baji’s husband is a transit driver and operates a rented auto-rickshaw (a local three-wheeled motor vehicle). Shahnaz baji herself has a knitting business. She knits clothes and sells them in markets to earn a profit. She has already successfully repaid two loans from Asasah (a microfinance institute of Pakistan). Now she is applying for a third loan to buy an auto-rickshaw for her husband.
This is a group loan, and she is joined in her request by four other members. Shaista baji and Shahnaz baji each want a loan to buy clothing for their knitting businesses. Zareena baji wants a loan to buy cooking oil, lentils, rice, and spices for her Punjabi food business. And Shamim baji wants a loan to buy plastic shopping bags to resell. The loan funds will be distributed among the group members, each of whom will invest in their 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.