Hanifan Mai baji is a 53-year-old lady and resides in a city named Vehari, Pakistan. Her husband is M., who has a fertilizer-selling business. He provides fertilizer to land owners so that they are able to nourish their plants. Hanifan baji works in a rice mill where she packs the rice in sacks. She earns $10 per month. Hanifan baji successfully repaid her first loan from Asasah (a microfinance institute of Pakistan and a Kiva Field Partner). Now she is applying for a loan to buy more fertilizer for her husband.
She is joined in her loan group by a few more members. Sugran baji wants a loan to buy wheat and rice to resell. Musarat baji wants a loan to buy a sewing machine to sew clothes. Maryam 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.