Shahnaz baji, 35, of Arifwala, Pakistan, married to M. Y., a wood seller for the past six years, has four children, two sons and two daughters. Her elder son is involved in a decorative embroidery business, while the others are attending school. Shahnaz baji, who operates a beauty parlor from her home, is requesting a loan to buy a hair dryer and some cosmetics for her business.
She is a group leader of four other women in her locality:
Waziran baji wants a loan to buy seasonal fruits for her fruit-selling business;
Sajida baji wants a loan to repair her auto-rickshaw (a local three-wheeled motor vehicle);
Muniran baji wants a loan to buy iron to make iron rods for sale;
Kalsoom baji wants a loan to buy vehicle wheels to sell.
This is a group loan. The loan funds will be distributed among the group members, each investing in her own business while at the same time guaranteeing 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.