Mussarat baji, a 42 year-old-widow who has lived in Pakpttan, Pakistan for the past 30 years, has seven children: five sons and two daughters. Her eldest son is a medical rep in a clinic, while the next eldest operates a grocery shop in the community. The others are enrolled in a local school. Mussarat baji has repaid her two previous loans from Asasah (a microfinance institute of Pakistan), and now is requesting a new one for her second son who runs the grocery shop. He is planning to start a new food business and so needs to purchase foodstuffs such as flour, cooking oil and spices, lentils and rice.
Mussarat is a group leader of five other women in her locality:
Mumtaz baji and Kosar baji each want a loan to buy auto-rickshaws (a local three-wheeled motor vehicle);
Mukhtar baji is requesting a loan to buy fertilizer to sell;
Rashida baji wants a loan to buy clothes to sell;
Naseem baji wants a loan to buy cigarettes to sell.
The funds for this group loan will be distributed among the group members, each of whom will invest in her own business. The members guarantee one another's loans, so if one member does not repay, the other 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.