The reluctant loan shark

When I first wrote about the micro-credit program on this blog, I emphasized how I didn’t want to become a loan shark and hunt people down for their repayments. I wanted to design the program so that people would naturally want to make their repayments.

As I wrote in a recent update, that hasn’t quite worked. In recent weeks, I’ve been talking with some of my cultural interpreters to figure out how to revive this idea. I asked one, “Why isn’t it the social pressure of having other waiting borrowers entice the first borrowers to make their repayments?”

This person responded by telling me, basically, how out of touch with it was and how radically different our lending practices are from the high-interest places in town that our borrowers are familiar with.

Naturally, they are ruthless. They charge excessive interest. They take a person’s all-important I.D. until the loan is repaid. They make the borrower pay the loan back in a few large payments over a short time. This explains, for instance, why all our borrowers showed up with their I.D.s the first time we met them and wanted to negotiate as short a repayment time as possible. (I discussed the program extensively with this same person before we launched the program and none of this ever came up. Would have helped.) My cultural interpreter seemed to think that if I just started hounding after the borrowers, they would repay.

Here’s the problem: I’m not sure I want to be that kind of guy. I manifestly do not want to be a loan shark and I do not want to be a coercive force.

But what if being that kind of coercive force is what is necessary for a program like this to work? What if the only incentive they’ll respond to is a constant nagging for money from me? How would that one-talent servant have done if his owner kept asking after him, rather than dumping the money on him and leaving? It doesn’t strike me as very graceful.

I haven’t decided what to do yet but I received some helpful clarity the other day when our growing HIV support group asked to meet with me. They wanted to know when we would loan more money, as I have long promised but continually delayed because I’m still waiting on more repayments. I said, “If you want to see me as just another white person who is here for you to take advantage of, fine. But we’ll run out of money and not have any more to loan. I don’t want to be like the people in town and take your I.D.s. You need to help us help you.” (That’s not verbatim. It all came out in mangled - but demonstrably understandable - Xhosa.)

There were lots of head nods and knowing laughter all around. I told them to get back to me when they had thought about it for a while. We’ll see.

This has all been a reminder to me of the importance of learning the context of a group before doing anything. The context in this situation is not just the other lenders in town but also an attitude that is common here that white people exist to hand out money and have plenty of it. It’s easy enough to say this but when that context is shrouded in an unknown language and different culture, it is significantly harder to learn. I don’t know what I would have done differently if I had known this last July but it would at least have been nice to know.