Not Just a Gift: Borrowing and Lending Between Friends
A borrower and a lender be.
The prevailing sentiment in America on borrowing and lending between friends (or family) is that any money given should be regarded as money gone. It is a “gift” to the borrower and a loan only in name. Public discussion on reddit echos the idea that backers personal loans to friends and family are foolish to ever expect repayment, and borrowers often feel reluctant or “undeserving” of community investment.
While many Americans do lend and borrow from people close to them, the lack of cultural trust in one another and the feeling that individuals need to make it on their own first diminishes how powerful this support network could be.
Why It’s Taboo
Americans stand out in the world as broadly regarding the exchange of credit and loans to be a legal agreement and calculation of past ontime payments and current income. One must earn the right to borrow money by showing that they have the ability to pay through assests and income. While this seems like a fair system on the face of it, banks and other lenders use rigid requirments that exclude many from accessing loans. If your car brakes down and you live paycheck to paycheck, a bank is probably not going to hand you $300 for a fix to get back to work. Those that do take on “riskier” loans charge sky-high interest rates and fees.
Other cultures regard communtiy saving and lending as a tool to uplift everyone. Latina and Chicano populations in the US unite close relatives and friends in a rotating savings and credit associations called Tandas. These informal loan clubs rely on personal trust and require each participant to donate a specific sum each month, which is dispersed according to the rules made by the whole group. Everyone in the club eventually gets the pot and benefits from either a timely, interest-free loan, or a return of their savings. This allows individuals and families to get through otherwise devastating crises, such as a medical emergency, or invest in helpful assets, such as a reliable car.
How Do We Trust Each Other More?
In my research at the Austin Center for Design, I am exploring how Americans experience lending to one another and how those relationships could be preserved, perhaps even strengthened through that process.
Through MYcircle, I am designing a guide for navigating these difficult relationships and offering personalized guidance and resources to those who wish to share their particular circumstances with me. Just visit the MYcircle website and subscribe, and I will send you a welcome email to get you started!
What’s keeping you up at night? Send me your ideas at kay.wyman at AC4D .com.