Shazia baji is married to R. M. and lives in a small neighborhood named Bund Road in the city of Lahore, Pakistan. She owns a two-room brick house and has been living in it for the last 15 years. She is the mother of four children: three sons and one daughter. All of her children are enrolled in a local school in her neighborhood. Shazia baji's husband has a scrap business with five years of experience. Shazia baji herself is a housewife and prefers to do household work and take care of her family. She successfully repaid her previous three loans from Asasah (a microfinance institute of Pakistan and Kiva’s Field Partner). Now she is applying for a loan to buy more scrap (plastic bottles, iron and papers) for her husband's scrap business.
She is joined in her loan group by a few more members. Sakina baji wants a loan to buy clothes to resell. Maya baji wants a loan to buy scrap (plastic and iron) for her scrap business.
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.