Shahnaz baji*, a wife of M., has been living in Chichawatni, Pakistan. She is the mother of four children, one son and three daughters. Her eldest daughter and son are enrolled in a local school in her neighborhood. Shahnaz baji is a housewife and prefers to do domestic chores. Her husband runs a grocery shop.
Shahnaz baji successfully repaid her first loan from Asasah, a microfinance institute in Pakistan. Now she is applying for a loan to buy groceries (lentils,rice,sugar) for her grocery shop. Shahnaz baji wishes to diversify her grocery shop into a general store.
She is joined in her loan group by a four more members. Shazia baji wants a loan to buy a donkey cart. Ghulam Fatima baji wants a loan to repair an auto-rickshaw (a local three-wheeled vehicle). Nasreen baji wants a loan to buy a buffalo to produce milk to sell. Suraiya baji wants a loan to buy more cloth to resell.
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.
*"Baji," which literally means "older sister," is a term of respect for women in Pakistan.
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.