Before I even opened my mouth to say hello to a group of associates the small community of El Rincon, Faustina F. was offering me some mango she was busy peeling before the start of the loan meeting. She is a kind and open 60-yr old lady who started her business six years ago with the help of loans from Esperanza. She is in the business of selling used clothing which she buys with her loans from larger towns and cities such as Samaná and Santo Domingo. She has one daughter who is 43 yrs old and lives in her own place. Mrs. F. is an evangelic Christian whose favorite food is arroz con vaca (rice with beef). She has hopes of seeing her business succeed to construct better living quarters and provide for herself and her husband.
Mrs. Faustina F. is a member of a 5 person group, Group 1, which is part of a larger micro-bank called Luz y Esperanza, "Light and Hope" in English. In the picture, Mrs. F. is second from the left. Her story is just one of a list of men and women who are improving their quality of life through the help of micro-credit loans of Esperanza. Together, this group has united with a common vision of a better life with faith and hope in their hearts and an unbreakable spirit. The concept of group lending is to have loans paid in a group to reduce the risk of a person defaulting, as others pick up where a person may lag to receive the next loan. Each of the associates in this bank has a similar business whether it is a gas station or the sale of clothing. Thank you for your support and awareness of this issue, and it is your concern and efforts that is able to bring a difference to the lives of people such as Mrs. F..
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.