Syeda baji, the wife of S. A., runs a tea stall in Vehari, Pakistan. Syeda baji owns a two-room brick house and has been living in it with her family for the past 15 years. Syeda baji is the mother of two sons. Her eldest son is an electrician and the younger son works in a factory on a monthly wage. Syeda baji is applying for a loan to buy tea, sugar and milk for her husband’s tea stall.
She is the leader of a group of women in her locality. Afzal baji wants a loan to buy a buffalo for her milk-selling business. Sheema baji wants a loan to buy groceries for her grocery shop. Ghafooran baji wants a loan to buy masonry tools. Allah Rakhi baji wants a loan to buy goats for her livestock business.
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.