Originating a joint-liability group loan
A joint-liability group loan is your institution lending to a formed group whose members are collectively responsible for repayment. This is institution-to-group lending on Ustawi's core lending engine — a fundamentally different product from the internal lending that happens inside a VICOBA fund.
Group loan vs. VICOBA internal lending
The two are easily conflated but are not the same product. In a VICOBA, members pool their own savings and lend to each other from the group's fund — it is a self-managed savings circle you help administer. A joint-liability group loan is your loan book: the institution lends money to a formal group, and the members are collectively liable to repay you. One is the group's own fund; the other is your exposure.
How joint liability is recorded
The defining feature is that a single loan is originated to the group, and joint liability is recorded on every member. If the group falls short, the liability is shared — the members stand behind the loan together rather than each carrying only their own slice. That collective obligation is captured on each member's record, not just on the group as an abstraction.
Originating on the core engine
- 1Identify the group and membersThe formed group is the borrower; its members are recorded with their shared liability for the single loan.
- 2Run it through originationA group loan is originated and serviced on the same lending engine as individual loans, so it follows the platform's approval and disbursement controls.
- 3Track at group and member levelRepayment is tracked both for the group as a whole and per member, so you can see the group's standing and each member's position within it.
Because a group loan runs on the core engine, it is subject to the approval ladder and disbursement requirement gates like any other loan — joint liability changes who repays, not whether the credit controls apply.