Loans for Groups

Pure Groups

To create pure groups loans, you must first create the group and then create the loan product. For more on groups and loan products, see Creating Group and Creating New Loan Products.

The only difference between a pure group loan and an individual loan is that a group loan is for a group of people, while an individual loan is for a single person.

Members of a pure group guarantee each other's loans. If a member misses a payment, it is the responsibility of all other members to make up the missed payment. However, the system does not keep track of which members defaulted on their payments. Therefore, if the loan defaults, the entire group will be held responsible.

When you deal with a pure group, you don't know how the money will be allocated. This makes it difficult to try to minimize the risk involved with the loan.

Schedule for flat rate.

The schedule shows installments for Group A's loan MAIN1559. The schedule is just the same as form individual loans. It Shows installments and thier balances as well as paid installments as indicated.

Solidarity Groups

Solidarity groups are a set of individuals who apply for a microloan under one loan contract. Each group member can use their portion of the loan for their individual purpose. When you disburse a solidarity group loan, you can allocate different amounts to each member. This allows you to monitor each group member's transactions, unlike with pure group loans.

When a group defaults on a pure group loan, it can be difficult to determine which group member was responsible. However, with a solidarity loan, each member's transactions are tracked individually, so it's possible to pinpoint the member who would have defaulted.

Solidarity groups help you keep track of all your members. You can easily identify members with a good credit history and offer them a new loan, leaving out those who have defaulted on their loans.

The solidarity loan schedule is the same as the pure group loan schedule.

Schedule for flat rate. The schedule above shows the details of a solidarity group loan for three clients. Each time a solidarity loan is created, the system creates a solidarity group loan for the total principal amount disbursed, as well as individual loans for each member based on their allocation. On this example, the system created three individual loans for each member. To view the loans, click the Loans tab next to the Schedule tab on the loan's profile view.