Looking for Financial Help? Be a Pretty Lady With Light Skin

If you've ever spent time on any crowdfunding sites—from Kickstarter to Kiva—you know the amount of people seeking your money can be overwhelming. It can be hard to choose when often everyone on the site seems so deserving. (Well, it's probably less difficult to decide when you're on Kickstarter choosing between funding that experimental art show on a barge or your brother's friend's album than if you're on Kiva trying to decide between two needy famers in Africa.) But, according to one study, some borrowers may have a built-in advantage in getting our attention—specifically the ones who are prettier, lighter-skinned females. Yep.

The study, which was led by Walter Theseira of Nanyang Technological University in Singapore, focused on Kiva.org and used one month of lending data from their site. Researchers worked with the info provided on each borrower and coded the photos used in their profiles to indicate their attractiveness and skin color (which was based on an established skin color scale). What they found was that people who were lighter-skinned got loans more quickly than people who were darker-skinned. Women did better than men, and attractiveness also influenced how quickly people got their loans funded. According to the study,

A borrower at the 75th percentile in terms of skin color (darker skin) is estimated to require 20% more time to have his or her loan funded than a borrower with lighter skin at the 25th percentile; similarly, a borrower at the 75 th percentile in attractiveness (more attractive) requires almost 25% less time to receive full funding.

Weight was also a factor, though interestingly, being overweight mattered more for male borrowers. Skin color and attractiveness mattered more for female borrowers.

Looking for Financial Help? Be a Pretty Lady With Light Skin

What's so bizarre is that even though lenders preferred lighter-skinned borrowers, they favored regions of the world where lighter skin is not as common, specifically Africa. They found that loans to Kenya are funded several times faster than loans going to Bulgaria, for instance. The effect of geographic discrimination turned out to be far more powerful than that of skin tone bias. This regional bias comes from the belief of lenders that their money is needed more and might go farther in poorer countries. Since African countries tend to be poorer, they win.

So why do these skin-color biases play any role at all? Well, it's probably not the result of some horrible, conscious racism (or so we hope). Rather it likely stems from some implicit discrimination that we're not even aware we're doing. But even if it's not done intentionally by lenders, crowdfunding sites like Kiva need to be aware of the implicit racial biases at play, and work to circumvent them so the whole system doesn't become unfair. If that happens, as GOOD points out, it will skew the system in a way that goes against the whole point of microlending, which is "to democratize lending and open doors to those excluded or discriminated against by traditional banking."

Since it's not necessarily a conscious problem, is there any way to work around it? Theseira says yes. There are ways to modify site design to workaround people's biases, but he wants to delve further into why this is happening before he's ready to make specific recommendations. Luckily, Kiva is very open about wanting to find a way to address these issue—of course, it's likely that these same biases affect giving on all kinds of sites. It's definitely important to rectify these imbalances where they exist, since there is big money at stake. At Kiva alone, nearly $200 million was loaned in the first five years they existed, which isn't exactly pocket change. But while we wait for them to make it harder for us to discriminate against people, we'll just have to settle for being more conscious about who we're directing our money at and why.

Micro-Racism: If You Want a Kiva Loan, It Helps to Be Pretty and Light-Skinned [GOOD]
What Do Donors Discriminate On? Evidence From Kiva.org [pdf]

Image via Kiva