The Relational Nature of Debt and Credit

Katie Roland (Academy Class of 2003)

We made our way out of Phnom Phen, traveling along a dusty dirt road until the chaos of the city disappeared behind us.  The shoulders of the country roads outside Phnom Phen were completely covered by trash, and I noticed a dog looking for food that would not be found, its bones poking out from under a sparse blanket of fur.  As we traveled farther down the road, we came upon small tin shacks, set inches apart from each other.  They seemed like they would tip at the slightest breeze, and yet these shacks provided much-needed shelter for dozens of children and their families.

It was September 2008, the beginning of the global economic crisis.  I had just arrived in Cambodia to learn more about WorldVision’s microfinance programs.  As the world tried to reconcile billions of dollars of bad credit and unpaid loans, I was about to learn first-hand how a microloan of $50 - $75 could change the life of an individual, a family, and even a community.

A woman named, Tay Leang* received us at the end of that dusty road and led us down a path to her home, her own rickety shack.  Tay Leang is a widow and mother to eight children.  She raises them in one of the poorest areas of Cambodia, a district known for its red-light sex slavery business.  Food is hard to come by; jobs are even scarcer.  The average per capita yearly income is US $343.  Tay Leang was responsible for feeding and caring for her eight children alone in the midst of these circumstances.

Her situation may seem hopeless, but a few years ago, WorldVision gave Tay Leang a $75 loan to help her start a fruit and vegetable business.  Tay Leang grew her business and paid that money back, giving her the opportunity to acquire larger loans from WorldVision.  Without the loan and her hard work, Tay Leang may have been forced to sell one or more of her children into bonded labor or sex slavery to help feed the others.  Or, she may have had to borrow from a local money lender, who would have charged her very high interest rates, extending her cycle of poverty. 

Instead, Tay Leang is now on her fourth loan and owns and operates both a fabric business and a welding service.  Not only is she able to provide food for her eight children, she now employs three other people in her community and is able to send two of her children to school.  Her loan repayments are cycled back to WorldVision’s microfinance subsidiary, VisionFund, and are loaned to others in need. 

Many people know that microfinance is a system of providing loans, savings opportunities, and business training to the enterprising poor to give them a hand up – not a “handout” - from poverty.  For WorldVision, recipients of loans are people who a typical bank is not likely to serve: people diagnosed with AIDS and individuals without collateral to offer in exchange for credit.  Yet, these same people have a repayment rate of 99.3 percent, aided by strategies of group lending and accountability.  (Group lending is a system whereby community members sign for each other’s loans and guarantee the full amount given to all participants.  If one member falls behind or cannot make payments, the group naturally encourages repayment or steps in cover the amounts due.)

In thinking through my trip to Cambodia and the principles of both lending and giving money, I was struck by a recent Op Ed by Margaret Atwood in The New York Times (October 28, 2008).  She points out that our system of debt and credit has lost the human element.

“Debt — who owes what to whom, or to what, and how that debt gets paid — is a subject much larger than money. It has to do with our basic sense of fairness, a sense that is embedded in all of our exchanges with our fellow human beings. But at some point we stopped seeing debt as a simple personal relationship. The human factor became diminished. Maybe it had something to do with the sheer volume of transactions that computers have enabled. But what we seem to have forgotten is that the debtor is only one twin in a joined-at-the-hip pair, the other twin being the creditor. The whole edifice rests on a few fundamental principles that are inherent in us.”

In this quote, Atwood calls us to think deeply about human nature.  She points out that we are created with some standard of right and wrong – some moral compass.  C.S. Lewis calls this compass The Law of Human Nature and states that human beings around the globe have a similar sense of how we ought to behave, a sense that we cannot do away with.  Atwood applies this standard of right and wrong to the creditor-debtor relationship, implying that giving or loaning money and borrowing it is not a simple, mechanical transaction.  Innate human values of trust and fairness enable the system to work, giving people the faith to make loans with the expectation that they will be paid back. 

If we take human relationships more seriously when borrowing and lending money, we might not request loans unless we have the serious intent and ability to pay them back.  We might also survey the world around us and recognize that our global neighbors are in need and that they are a smart investment.  Even a small microloan has the power to transform multiple lives.  And organizations like World Vision provide the opportunity for someone like Tay Leang to receive that gift while allowing donors the blessing of entering into a personal relationship with a recipient.  The transaction is relational as well as monetary.

If we are from the United States or another Western society, we are likely in a position of influence.  Many of us have a voice we can use to advocate for the voiceless, and we most likely have the resources and opportunities to give money to help those less fortunate than we are.  As followers of Christ, we acknowledge that we have received a gift of grace that we don’t have to repay.  Christ, the one who knew and loved his children, took on the ultimate debt so we could receive the ultimate “credit”.  How can we pay that gift forward?

As I consider my own financial situation, my borrowing and lending habits, as well as the situations of people like Tay Leang, I ponder this verse:

(1 John 3:16-18)  This is how we know what love is: Jesus Christ laid down his life for us.  And we ought to lay down our lives for our brothers.  If anyone has material possessions and sees his brother in need but has no pity on him, how can the love of God be in him?  Dear children, let us not love with words or tongue but with actions and in truth.

I am far from where I need to be in response to this verse, but I have given and will continue to give thought to the lives of the human beings on both ends of a lending or giving transaction.  In some situations, I am required to give and receive money in relationship with a banker.  In others, I am in relationship with someone like Tay Leang and simply give my money away, without requiring any repayment.

As governments around the world continue to seek solutions to the global economic crisis, I’d venture to guess that with a 99.3% loan repayment rate, the enterprising poor might just be the best way to invest.

*Name has been changed to protect the privacy of the client.

Formerly a Senior Director of Marketing at World Vision, Katie now serves as a Senior Account Director for a military healthcare and wellness program called Military OneSource. Katie resides in Washington D.C., is finishing her Masters in Communications at Johns Hopkins University, and attends Grace DC Presbyterian Church. Katie is a 2003 graduate of the Trinity Forum Academy.

1 Responses • Alumni, Features, Guest Speakers, Thu 16 Jul 2009