Nasreen baji is the widow of M. N. and lives in the city of Pakpattan, Pakistan. Pakpattan city is famous for its shrine of great Punjabi Sufi poet, Baba Fareed Ganj Shakkar. She has been living in this city for the past 10 years. She is the mother of five children: three sons and two daughters. Her eldest son has a juice stand. Her second son has a salon, and her youngest son is not currently employed. Both of her daughters are in school, in the 5th standard. Nasreen baji sells clothing, and she has been in this business for the past two years. She successfully repaid her first loan from Asasah (a microfinance institute of Pakistan). Now she is applying for a second loan to buy more clothing to expand her business.
This is a group loan, and she is joined in her request by three other members. The loan funds will be distributed among the group members, each of whom will invest in their own business. Zahida baji wants a loan to buy a sewing machine to sew clothing to sell. Razia baji also wants a loan to buy more clothing to sell, and Shaheen baji wants a loan to buy spare motorbike parts to sell. 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.