Shama Begum, 36, of Pakpttan, Pakistan, is married to H. M. T., the driver of a 32-seat bus called “Coaster” for the past 10 years. The mother of a son who operates a rented auto-rickshaw (a local three-wheeled motor vehicle), and two daughters, both students, Shama baji is a seamstress whose earnings pay her daughters’ school fees. Having repaid her two previous loans from Asasah (a microfinance institute of Pakistan), she is now applying for a new loan to buy an auto-rickshaw for her son.
Shama baji is a group leader of five other women in her locality:
Sajida baji and Shahnaz Akhtar baji each want a loan to buy the seeds of different plants to sell;
Azra baji and Naseem Akhtar baji each are requesting a loan to buy clothes for their clothes-selling businesses;
Kaneez baji wants a loan to buy wheat 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 does not repay, the others 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.