3 Things I Learned Making 30 Kiva Loans in 30 Days
By: Aaron Saray
Tags: Micro Loans, Lessons Learned, Kiva, Charity

1. Don’t Judge Gamification Negatively: It Works

Whenever I see a set of badges, or some sort of tiered status system on a website, I get a little irritated. I just want to do my tasks and not always be in competition with other people. I tend to shy away from gamification-based systems. If I’m being honest, I sometimes feel like I’m “better” than that — I don’t need gamification and badges to do what’s required of me.

Conversely, when I see a progress bar, I feel very driven. I want to move that to 100%, if not just to remove it from the screen. I don’t necessarily want a reward, but I want to be “done” with this — thank goodness I have this progress bar that will tell me when I am.

On reflection, I realize these are just different sides of the gamification coin. The first being very obvious while the latter is more subtle. Kiva’s use of gamification was actually making my experience better and my task easier.

You are quite spoiled for choice when it comes to picking a loan on Kiva. How does one even decide? Instinctively, I sorted the available loans by “amount left.” I was excited when I saw there was only $25 left to finish a loan. That meant if I contributed now, I could close out this loan. Today I could help notify that recipient of good news: their loan is on its way! But, if I’m being honest, there was also something very fulfilling to me to see that my action moved that progress bar to 100%, $0 remaining to complete this loan.

I found a portfolio report that showed the countries of origin for my loans. At the bottom, it gave me an option to loan to a new country. They had this same functionality for field partners and for areas of interest. This encouraged me to have more diversity in my loans both geographically and by application. I enjoyed seeing the list of countries I had loaned to increase. I was already happy to do the loans, but this was a cherry on top.

Gamification is not bad. Because it is multifaceted, it can be applied in many ways. It works to encourage usage and to increase efficiency. I was able to pick loans faster and felt that my participation was being felt in more places. Gamification isn’t just about vanity metrics and bragging rights.

2. Loans Can be Better Than Charity

Around the middle of this experiment, I got a notification that I was receiving repayments from loans I had made last year. Unless the loan defaults, you get your money back minus any possible currency devaluation. If need be, you can withdraw your credit from the Kiva website. (There is a donation portion of Kiva. You’re not required to donate to them, but they do request a donation on each loan to cover the costs of facilitation and their overhead.)

That made me question what I was doing: am I less committed to helping people because I’m not giving money, only loaning it? I honestly started to feel ashamed; I felt that I was taking the easy way out. While I didn’t have a savings surplus, I did have enough to give this money without expecting it back.

I pondered the times in my life where I was struggling financially. I never asked for help, actively pushed it away from friends and family, and wallowed in my shameful pride. I wanted to do it on my own! People offered me gifts, but that made me feel even worse about my situation. I felt like they were feeling sorry for me.

No one offered to just lend me money.

But, I had done just that for 30 people. And that was the right decision.

See, I helped 30 people retain their pride. Some of the conditions described were pretty hard, horrific to me even. But, here they were, trying to flourish and build businesses or get a better education. They had pride. They knew deep down that if they just had access to the capital, they could not only return it but generate even more value.

The entrepreneurs I loaned money to gained the ability to accomplish things sooner, or purchase other items in a leveraged way. While a pure gift would mechanically accomplish the same things, I’d wager that a low-stress loan is a much better way to feel the entirety of accomplishment. You developed the system, you did the work, and you only needed a temporary boost. You basically did it on your own versus receiving a hand-out. And, someone believed in you, not felt pity for you.

3. Fund Better Alternatives and Skip Shame

Especially in America, we’d like to think that we’re “above” all the struggles of the developing countries. We may even look down in disgust at some of the things they have to do each day to survive. How could you be using charcoal for heating — don’t you know that’s inefficient and dirty? Why are you selling and reselling cattle — can’t you just eat plant-based alternative meats? We pretend like we didn’t struggle through (and sometimes still participate in) these activities. What a shame, we think, that these other countries are making these poor choices.

Surely, then, I wouldn’t want to loan money to support these things, right?

But what choice do my loan recipients have? A vast majority of them are simply trying to survive. Or, they’re trying to gain some wealth to invest in their children’s future. Or, at the very least, they’re trying to avoid disease, pain and starvation. How can you expect them to make any other choices but what’s best for them at this exact moment?

I think we judge these decisions as bad choices, but they’re not. They’re just necessity. And are we much different/better? Even in a country where we have a number of better options, a lot of us (including me) still make the same old decisions ignoring their harmful consequences.

To encourage better choices, we seem to favor the stick, and not the carrot. The stick usually consists of either a small fine and tax, or some weak shame. For example, I could afford gas heat, and I could afford solar-based heating, so why do I go with the gas? Because it’s cheaper. Why would I go solar? As far as I can tell, only to avoid the shame that friends and family might put on me. There seems to be no reward (it’s actually more expensive), just an absense of shame.

These loans have shown me that we’re not doing enough “carrot-work.” There should be an overflowing amount of loans for things like solar-power in these villages instead of a new wood-pellet stove. We need to invest more, globally, in making the better choices cheaper and more available. We can’t fault or shame people into picking something different when it’s their only option to survive.