Mukhtayar baji is the wife of F. H. who has a food selling business. Mukhtayar baji has lived in Lahore, Pakistan for the past 20 years. She is the mother of nine kids: five sons and four daughters. Her first two sons run a barber shop. The others are getting their education from a school near their house. Mukhtayar baji has a business sewing clothes. She does this to share the financial burden of her husband. Mukhtayar baji successfully repaid her two loans from Asasah (a microfinance institute of Pakistan). Now she is applying again for a loan to buy ingredients(lentils, cooking oil and spices) for her husband’s food selling business.
Mukhtayar baji is the group leader of another three women from her locality. Sugran baji wants a loan to buy a sewing machine for sewing clothes. Shahnaz sultana baji wants a loan to buy an auto-rickshaw (a local three-wheeled motor vehicle). Rehana kosar baji wants a loan to pay off the remaining installments of her auto-rickshaw.
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.