Simon S. is a farmer with fields of bananas, beans, maize, cassava and potatos. He is even in a position to sell from his home where he has a stall selling cabbage, tomatoes, onions, carrots and spices, some from his lands while others he buys from fellow farmers especially those items that he does not grow.
This stall is mostly managed by his wife while he does most of the manual work with the help of hired manpower. He is our client. He is married with 5 children, all in school and he cares for 3 orphans thanks to loans that help to bring in an extra income. He has been able to buy a plot of land plus buying more household items for his family and now they are happy together. He needs a loan to buy more produce for sale.
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.