Mumtaz Baji is a 38-year-old married lady and has been a citizen of a city named Pakpattan, Pakistan for the past 20 years. Her husband, M. N., runs a small hotel in the community where he sells Punjabi food. Pakistani people are fond of Punjabi food. Mumtaz Baji helps him by cooking the Punjabi foods (daal chawal, dahi bhalas and samosas). She successfully repaid her two loans from Asasah (a microfinance institute of Pakistan). Now she is applying again for a loan to buy material (lentils, cooking oil and spices) to expand her husband’s food selling business.
She is a group leader of some more women of her locality. Allah Rakhi Baji and Rehana Kosar Baji each want a loan to buy a donkey cart for hauling. Ashran Baji and Shamim Akhtar Baji each want a loan to buy livestock (goats) to resell. Naseem Baji wants a loan to buy cold drinks for her cold corner.
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.