What is group lending and how does it work?

Group lending is a unique financial service for low-income entrepreneurs. To obtain such a loan it is necessary to form a group of three or more individuals who run businesses that earn income and have been active for at least three months. Group members guarantee each other’s loan repayment, which is why collateral is not necessary. FINCA Bank has a high loan repayment rate – more than 99%. This demonstrates that group members do their best not to let each other down in loan repayment, since usually they are business colleagues, neighbors or relatives. There are groups that work for 10-15 years and their businesses successfully grow thanks to group loans. A major advantage of group lending is the simplicity of receiving the loan — a passport is enough.