Sarwar N. K. is the wife of N. K. and lives in the Walton area of Lahore City, Pakistan. She has been living in this city for the last 25 years. She has one daughter, named Rakhshanda, who runs a beauty parlor. Her husband is a government servant. Sarwar baji works as a maid in several houses. She successfully repaid her first loan from Asasah (a microfinance institute of Pakistan). Now she is applying for a second loan to buy materials (cosmetics, creams, machines, etc.) for her daughter's beauty salon.
She is joined in her loan group by a few more members. Anwar S. H. wants a loan to repair her auto-rickshaw (a local three-wheeled motorized vehicle). Salma A. M. wants a loan to buy construction materials (cement, sand, etc.). Tariza S. M. wants a loan to buy candies and sweets 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.
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.