Adapting to People's Needs: a Common Cents Lab Workshop Reflection

Last month, Community Credit Lab had the opportunity to participate in the Common Cents Lab Fall 2021 Workshop. As part of Duke University’s Center for Advanced Hindsight at the direction of Dan Ariely, Common Cents Lab researches behavioral economics to improve the financial health of low-to-moderate income households by creating and testing financial solutions.

The takeaways from the workshop are invaluable to CCL’s work:

• Discussions opened our minds to understand why people behave in certain ways and to think beyond current actions to find better solutions.

• It made us reflect on and confirm our purpose as an organization: centering every borrower’s individual needs and goals.

• It motivated us to apply these learnings across all stages of the borrower process, with the goal of improving the overall experience for borrowers when accessing a loan from Community Credit Lab.

The workshop facilitators did a wonderful job explaining studies they had conducted involving groups of people in different contexts, across different demographics and various geographies. Under the premise that humans are not always rational, we learned about strategies to understand people’s behavior and increase CCL’s ability to support borrowers effectively. Examples include providing economic, social, and psychological/moral incentives, adding or removing friction, and essentially changing the environment to encourage people to understand and select the desired choices that work best for the borrower.

The common denominator across Community Credit Lab's relationships is communication.

We joined this workshop to explore ideas on how to improve our borrowers’ overall experience and offer them the best possible assistance at every stage of the process. Expectations vary, but the common denominator across Community Credit Lab's relationships is communication. Most of our borrowers are constrained in terms of time and resources, which has often been a barrier to keeping communication channels open. In this workshop, we focused on interaction with borrowers in the repayment phase, with whom communication and repayment have been particularly difficult. With this in mind, we worked towards facilitating communication by creating messages with limited words and clear, simple choices. We believe that borrowers are more likely to open and read a short message, encouraging them to respond and let us know their preferences. By implementing this initiative, our hope is our borrowers help us serve them better.

Common Cents Lab’s research results in models that work for most individuals and communities while being transparent about alternatives. That is an incredible accomplishment, as it points us in the right direction at times when there is no clear path to follow. At Community Credit Lab, we believe that there is no one-size-fits-all solution. These discussions made us reflect on and confirm our purpose as an organization. In everything we do—from the moment we establish Lending Programs with our Lending Partners until each individual loan is repaid—we center our borrowers. We see our loan as a tool that helps our borrowers fulfill their needs and achieve their goals, which we recognize as being different across all individuals. We do everything within our means to make sure that each borrower walks out of our programs in a better position than when they started. And by the way, better position is defined by each of them.

In a broader context, we are currently working on mapping the entire process that borrowers go through. Borrower surveys, informal feedback, and our own experience help us identify areas of improvement. Learnings from this workshop will be put into practice as we reflect on our borrowers’ choices and design solutions involving options that may work better to meet each individual’s needs.