We trust strangers so much we’ll even lend them money

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Sign for Barney's Loans, corner of Second Ave ...Image via Wikipedia

People trust peers, even if they don’t know them. This is the observation behind the success of online communities from TripAdvisor to reviews on Amazon or indeed any one of the many examples of online communities that are growing and flourishing. We trust these strangers-cum-peers with important decisions in our live – from which hotel to book for our annual holiday, to support on medical or financial decisions. And some trust these strangers-cum-peers so much that they even lend money to them.

We know that people trust the advice and recommendations of peers. They connect through their content, their stories and their experiences. If somebody tells us about their life then we know more about them, we can empathise with them and understand better the decisions they tell us that they make. The more we get to know people the more we can assess the level at which we trust their thoughts and their stories. We learn more information about them and this lets us evaluate their thoughts and the relevance of these to us.

And it works – we can get to know people online only through their conversations and ideas. In fact it makes it easier for us to find people like us. They no longer have to be near us or ever met us in person. The ideas alone are enough to connect us.

One example of the level at which we are able to build relationships of trust online is shown by the peer-to-peer micro-lending sites, such as Kiva or Zopa. These sites rely on individuals needing a loan finding others with money to lend. As a lender you obviously need to feel that the organisation behind the scheme has a strong background and a low default rate. But when it comes to actually lending your own money to an individual it is the relationship you can build with that person themselves that counts.

You can’t talk to them or meet them. Rather you have to rely on their stories, ideas and contributions online. You get to know them by what they tell you and what they reveal to you. You find people with whom you can empathise or understand. And through these ides and stories alone you can make a decision to lend them money.

This is, of course, a great thing. People wanting small amounts of money that can make a real difference to their lives. And because we can now connect them online this is possible on a much more peer-to-peer basis. Of course, it also shows the power of online communities and our ability to connect with people through shared ideas and discussions. Whilst I might be willing to lend money to somebody like this, I probably wouldn’t be willing to lend money to the person that I see on my way into work everyday but have never spoken to, and know nothing about.

Online communities allow us to find and connect with people through ideas. Through sharing ideas in this way we really get to know them, and really start to trust them. And that’s why online communities can be really powerful.

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7 Responses
  • May 24, 2009

    Hi Matt,
    I am a big fan of Kiva – just this morning I was sent another $8 repayment from a business in The Dominican Republic I have lent to and then gave a $25 loan to a group of entrepreneurs in The Congo.

    Also worth looking at is http://www.myC4.com It’s a bit more hard-nosed (less charitable) than Kiva, but perhaps more sustainable as a result.

    Charlie Osmond May 24, 2009
  • Socio-collective financing | AccMan
    May 26, 2009

    [...] We trust strangers so much we’ll even lend them money (freshnetworks.com) [...]

    Socio-collective financing | AccMan May 26, 2009
  • May 27, 2009

    I’m continually amazed at how our feelings and intuition can lead us to decisions in place of facts. We humans truly want to trust and believe people, and assume the best in others. Sadly, con men take advantage of that. Fortunately, the good far outnumber the bad. No need to get cynical!

    Paul Johnson May 27, 2009
  • May 27, 2009

    re: “Whilst I might be willing to lend money to somebody like this, I probably wouldn’t be willing to lend money to the person that I see on my way into work everyday…”

    i wonder if this is (at least in part) because connecting with someone online means our first impression of the person is not a judgment based on what the person looks like, but rather on what the person says/writes/shows — perhaps our daily in-person encounters are too fraught with us judging “books” by their cover?

    Denise Lee Yohn May 27, 2009
  • Michele
    Aug 30, 2010

    I would love some help here. I am a victim of Domestic Violence and I have made so many phone calls trying to get some help. I want to leave the state that I am in and get to a safe place. I have called everywhere looking for some assistance to move me and my stuff. The living in fear is taking its toll on me. I need to get out and beable to live my life in a safe place. Can someone please help me. I am living in TN and need to go to AR. Please someone help me so I no longer have to live in fear. Thank you and God Bless.

    Michele Aug 30, 2010
  • Nov 25, 2010

    I want to borrow money to build a boarding house in indonesia.. I am looking for the figure of 1.2 billions rupiah or around $130,000.. Anyone interested? I’m willing to give 5% p.a interest over the course of ten years. You can hit me on my email irwanhutamas@gmail.com

    I need quick response because the project may start in january or february because if I dont get investor then i need to decide to borrow bank.. Cheers

    Irwan Nov 25, 2010
  • Richard
    Apr 29, 2011

    Hello i am struggling to pay of my debt of 11000 pound as it is all hard cash from a previous relationship and colleagues. I have tried to get a loan but have a poor credit rating if some one could please help my email is riggers1879@hotmail.co.uk

    Richard Apr 29, 2011

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