Alice N. is a very hardworking lady with a business selling clothes for women, men, and children in her locality. Her previous loan was very successful for her business. She is now seeking a new loan, again from Pearl Microfinance. One of the tangible benefits from her loan is that she bought herself a motorcycle that is making money for her. However she has a plan of buying another motorcycle so as to increase her income since her expenditures keep on increasing as her children join higher classes. Alice seeks a loan to be able to buy more clothes for sale. Alice says this is the right time to stock more clothes that will bring in profits since the school term is ending. And by the time her children go back to school, she will have made enough for their school fees and other school requirements.
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.