Microloans flipped the traditional concept of collateral on its head.

Why?

Because the borrowers didn’t have traditional items of value.

Instead, they used a social network as collateral.

A group of five, usually women, self organizing and applying for a loan.

Initially, two of the five would be approved and get a loan. If they demonstrate successful repayment, the next two in the group got loans.

Each person received their own loan, and was expected to replay it, but if one person in the group defaulted the entire group would be ineligible for loans in the future.