Yeko is a light-hearted and clever purveyor of fresh fruits and matoke, a traditional local dish made from bananas. She uses her loans from Pearl Microfinance to purchase passion fruit, sweet bananas and sweet potatos from local farmers in her village, and she sells them and the matoke in the Lugazi Food Market, seven miles away, every Tuesday and Wednesday. On a good day, Yeko will make a 20,000 Ush profit for her efforts. She invests her profits in coffee. She buys 200 kilos of whole coffee beans for 1,000 Ush per kilo, then dries, roasts and packages them for sale to a variety of retail food stores and markets in and near her village. Yeko’s husband, a home builder, spends most of his time with his other wife and does not contribute any of his income to supporting his primary family. Yeko depends on the income from her food businesses to keep her children in school and pay for living costs.
Other members of her loan group are in similar situations.
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.
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