Why Some People Never Return Borrowed Money

Almost everyone has experienced it at some point. A friend urgently asks for Ksh500 and promises to return it next week because they need to sort out an emergency.

At first, the request feels genuine and straightforward. You lend the money expecting it to come back. Then the silence begins. Messages go unanswered, and follow-ups become uncomfortable. 

Weeks turn into months, and eventually, you realise the person has no urgency to repay you.

While this behaviour is often dismissed as irresponsibility or dishonesty, psychology suggests there is usually more happening beneath the surface.

Also Read: Why Some People Are Always Borrowing Money from Friends & Family

Psychological Ownership of Borrowed Money

One of the biggest explanations comes from a concept known as psychological ownership.

The moment some people receive borrowed money, their brain subconsciously starts treating it as their own. Instead of viewing the money as temporary, their minds absorb it into their normal finances. Once this mental shift happens, the emotional urgency to repay weakens.

This is why some borrowers spend the money more freely than expected, stop thinking about repayment immediately or become defensive when reminded.

To the lender, the debt remains active every day. To the borrower, the money may already feel emotionally settled.

This psychological shift becomes even stronger when the loan comes from friends or family because informal borrowing often lacks clear structures, deadlines, or consequences.

Present Bias: Solving Today’s Problems First

Another major explanation is something called present bias. Humans naturally prioritise immediate problems over future obligations. When someone is financially stressed, the relief of solving today’s problem feels far more important than the discomfort of repaying later.

In the moment, borrowing creates emotional relief as the rent gets paid, transport is sorted, or an emergency is handled. But repayment belongs to the future, and future problems tend to feel less urgent to the brain.

This is why many borrowers genuinely intend to repay at first. However, once the immediate crisis passes, new needs appear, and repayment keeps getting pushed further down the priority list.

Also Read: Why People Lie About Money

The Guilt-Avoidance Cycle

Ironically, many people who fail to repay loans often feel guilty about it. But instead of confronting the guilt directly, they avoid it.

Psychologists call this avoidance behaviour. When repayment becomes emotionally uncomfortable, some people start ignoring calls, delaying responses, avoiding physical meetings, or becoming defensive.

Avoidance temporarily reduces emotional stress. The borrower feels relieved by escaping reminders of the debt.

Over time, embarrassment can become stronger than the original intention to repay.

Why People Feel Less Pressure to Pay Back Loans from Friends/family

People also behave differently depending on who they borrow from. Formal lenders such as banks, SACCOs, or mobile loan apps come with penalties, deadlines, and risks of negative CRB listing. Friends and family usually do not.

Because of this, the brain unconsciously treats informal loans as soft debt. The emotional pressure to repay is lower because the consequences feel less immediate or severe.

How to Protect Yourself When Lending to Friends and Family

Understanding the psychology behind borrowing does not mean accepting bad behaviour. It simply helps you approach lending more carefully.

Setting clear expectations matters. Agreeing on repayment dates, amounts, and follow-up plans reduces ambiguity. Lending only what you can emotionally and financially afford to lose is also important, especially in informal relationships.

It also helps to separate generosity from obligation. Sometimes helping someone may mean offering support that is not financial.