Parveen Akhtar baji is a wife of M. and lives in a city named Borewala in Pakistan. She has been living in this city for the past 33 years. She is the mother of five sons. Her elder son is a painter of doors and windows of houses, the next son makes jewelry boxes, the next works in an army, and her younger sons are in 8th Standard. Parveen baji’s husband has a wood selling business. He has been selling wood for the past 10 years. Parveen baji herself has a thread selling business. She gets thread from old warm clothes. First she pulls the thread out from sweaters and then washes and dries it. At the end she makes a roll of that thread and sells it in shops for profit. She doesn’t care about the pain she takes in the process of thread selling because she focuses only on the profit that she wants to earn. She successfully repaid her first loan from Asasah (a microfinance institute of Pakistan). Now she is applying for a loan to buy more warm clothes and sweaters in order to sell more thread.
She is joined in her loan group by a few more members. Bilquis baji wants a loan to buy wood to resell. Sheeman baji wants a loan to buy scrap (plastic bottles and waste papers) for her scrap business. Shakeela naz baji wants a loan to buy iron for her scrap business. Farzana baji wants a loan to buy groceries for her grocery shop.
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.