A recent study by Nanyang Technological University in Singapore reportedly found that bias is prevalent among individual lenders using Kiva, a US-based online microlending platform. The study found that geographic bias is the most common, with lenders being more likely to help someone from Africa based on the perceived relative need in the region. The study found that skin tone also plays a part in donors’ decisions: “attractive, light-skinned females” tend to achieve their financial goals much more quickly than “overweight, dark-skinned, unattractive or male” entrepreneurs. According to Walter Theseira, lead author of the study, this trend seems to be more prevalent among infrequent lenders, while frequent lenders are more “strategic” and “businesslike.” Kiva is reportedly investigating ways to adjust the website’s format and design to counteract potential bias based on physical appearance, including reducing the prominence of photos or restructuring borrower profiles so that Kiva lenders have to spend more time reading information before donating.
Kiva reported funding approximately USD 90 million in loans to borrowers in 60 countries during fiscal year 2011.
By Charlotte Newman, Research Associate
About Kiva
Incorporated in 2005, Kiva is a US-based online portal allowing individuals to make loans to microfinance institutions (MFIs), which then make loans to people with low incomes. In 2011, approximately USD 90 million in loans was funded through Kiva and Kiva’s field partner MFIs in 60 developing and rich countries. As of 2012, Kiva is launching a new platform, Kiva Zip, enabling users to lend directly to microentrepreneurs around the world.
Sources and Additional Resources:
Care2.com: “Kiva Lenders Prefer to Donate to Pretty, Light-Skinned African Women,” http://www.care2.com/causes/kiva-lenders-prefer-to-donate-to-pretty-light-skinned-african-women.html
Walter Theseira, et al: “What Do Donors Discriminate On? Evidence From Kiva.org,” http://www.rug.nl/gsg/Research/Conferences/EUmicrofinconf2011/Papers/1new.9.Theseira.pdf
MicroCapital.org story, January 26, 2012, “MICROCAPITAL BRIEF: Kiva Piloting Peer-to-Peer Microfinance Lending Platform Kiva Zip in Kenya, San Francisco,” https://www.microcapital.org/microcapital-brief-capgemini-group-microworld-launch-digital-microfinance-platform/
MicroCapital.org story, May 5, 2011, “MICROCAPITAL BRIEF: 17 Websites Now Allow Individuals to Commit as Little as USD 20 as Microfinance Loans,” https://www.microcapital.org/microcapital-brief-17-websites-now-allow-individuals-to-commit-as-little-as-usd-20-as-microfinance-loans/
MicroCapital Universe Profile: Kiva
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Kiva
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