Azra baji, a 27-year-old resident of Pakpattan, Pakistan, is the wife of S. S., a cobbler for the last 12 years. She helps him in his shoe-making business and is now applying for a loan to buy leather and polish for the enterprise.
Azra baji is a group leader of four other women in her locality:
Rashidan baji wants loan to buy masonry tools;
Sakina baji and Jamila baji are each requesting a loan to buy wheat to sell;
Ruqaiya baji wants a loan to buy fertilizer 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 mutually guarantee one another's loans so that if someone 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.