The Money Game

Aug 14, 2013

Assistant Professor Akshay Sharma, at center, works with women participating in a micro lending collective, which pays for basic entrepreneurial ventures.

As the saying goes, it takes money to make money.  But where does that leave the four billion people around the world who live below the poverty line? 

A Virginia Tech Professor is tackling that problem from a new perspective.  

Most people have heard the term ‘micro finance.’  Cooperatives lend small amounts of money to entrepreneurs and small businesses. The concept began in developing nations to help women start their own businesses. Experts say poor people who receive these loans repay them at the astounding rate 99.7%.

“So now all your big banks and private corporations are into micro financing," says  Akshay Sharma, Associate Professor of Industrial Design at Virginia Tech.  He and a team of students have created a new game to teach people how to do micro finance.  

Often, when it comes to money, people think it’s so much more complicated than it actually is. So the team decided to use their skills as industrial designers to make money lending, saving and repaying user friendly and fun.  This is especially important for the largest segment of micro-finance users, poor women in developing countries.

“When you’re talking about women who are really smart but who are challenged in their ability to read or write how do I convey the concept of principle interest, interest linked to duration of the loan amount. How can I say all those in a visual manner number one and number two without making it childish?"

The game is played on brightly colored cloth with pockets in which players insert notes at different intervals around the board to mark what they borrowed and when they will pay it back. Like the secretary desk of an accountant, this cloth helps keep loans and repayments on track in a simple visual way making it easy for all to use and determine at a glance where things stand.  The local community aspect of this allows for flexibility when it comes to repaying the loans - something that can make the difference between success and failure for any business.

“It’s not like a bank is dealing with a customer. It's a cooperative that is trying to help others out. For example, if I get a loan for buying a cow.  Everyone in this group is basically in the same neighborhood. And I have the first month, very productive, I’m selling the milk and my income is higher so I’m going to repay the loan in time. But suddenly the cow, for some reason dies.  Everybody in the group knows that and they say OK we’ll give you six more months to repay the loan," says Sharma, adding that the most critical aspect of the whole micro finance game is that, the interest on the personal loans to the individuals comes back to the group to share.  The magic of compounding interest and you’re on your way to a positive return on your investment.

“If you could create an app and have a group of freshman that come into Virginia Tech and creat a self help group and each student is just saving 20 dollars every 2 weeks, you’d be surprised how much financial assistance they could get from each other.”

Akshay Sharma’s micro-finance game is now part of a training program by the ministry of women and child development in Rajasthan, India.  There are 75 self-help groups already and they hope to double that in the next year.