Interested Lending

Someone inquired yesterday about usury.  Now there’s a topic you don’t hear too many people asking about these days.

Microfinance operations have been growing in popularity.  Organizations such as Kiva make loans available to people in places that wouldn’t be able to secure a loan otherwise.  The loan allows the borrower to invest in or expand their business, allowing them to improve their life as they repay the loan.  With Kiva, the individual lender can make loans to specific borrowers, assuming full risk for the loan.  This means if the borrower defaults, the lender (me, for instance) is out of luck.  However there is no interest on the loan – meaning that if and when the borrower repays, I receive my initial loan amount back but nothing more.

Lending Club is similar except that as the lender, I earn interest on the loan.  This will certainly provide incentive to some people to loan who wouldn’t otherwise.  It still claims to be helping people who might not qualify for loans under other circumstances.  But it also raises the question – for a Christian – of whether or not lending money to earn a profit as interest on the loan is unChristian.

Certainly the Old Testament is replete with warnings and prohibitions against usury.  Exodus 22:25 and Deuteronomy 23:19-20 seem like important texts in this regard.  One of the constant complaints of the prophets was that the rich took advantage of the poor through high interest loans (Ezekiel 18:13, Nehemiah 5:1-13, Jeremiah 15:10, etc.).  As such, faithful Jewish people have traditionally recognized that to lend to another Jewish person at interest is not permissible, though lending to non-Jews at interest is not.  But what about Christians?  Are the Old Testament prohibitions on lending at interest applicable to us?

I presume not.  But before you get all excited (or angry) about that, let’s think it through.  As with many of the Old Testament / Mosaic laws, God’s purpose in giving them to his people was to distinguish them as a geo-political, socio-economic theocracy.  He was making a point through how his people would conduct themselves.  The Church has long held (since the first Church Council in Jerusalem – Acts 15) that these Mosaic laws are no longer binding on followers of Jesus Christ.  The New Testament has very little to say on the subject of lending at interest, with Matthew 25:27 and Luke 6:35 seeming to be the only exceptions, and it could be argued that in neither passage is Jesus actually sustaining the Mosaic prohibition.

All that being said, how do I love my neighbor who I lend money to?  I think that the very clear sense of Scripture as a whole is that my lending to my neighbor should not harm my neighbor.  This prohibits any sort of machinations on my part to deliberately mislead my neighbor into a disadvantageous situation, but it also means that I don’t get to unfairly profit on the blessings I have received from God at my neighbor’s expense.  Somebody (my neighbor, perhaps!) might argue that lending to somebody at 20% interest isn’t unfair if that person can’t get a loan any other place.  Perhaps that’s true, but that doesn’t mean that I have to charge them that much interest, either.

At a certain level we need to recognize that we’re already likely involved in the business of loaning at interest.  If you have money on deposit at the bank, those reserves are theoretically able to be invested – loaned out – to businesses and individuals for the bank to make a profit and for you to earn interest (though these days, you have to have a lot of money to get even a small amount of interest on your money at a bank!).  We expect to earn interest in various situations.  Some might argue that even your grocery store customer card that entitles you to lower prices on certain products is a form of interest being received in return for the store’s right to gather information on your purchasing habits.  In other words, we are regularly selling and being sold for interest, and there are very few who can claim they aren’t.

So I don’t have a problem with microfinance lending companies.  I want to make sure that if I am earning interest, it isn’t excessive.  And I personally think that we should still be open to lending money to people we actually know at no interest.  Not everything is about making a buck.  Helping a neighbor out is valuable in and of itself, and there may be times even when repayment shouldn’t be expected, as Jesus states in Luke 6.  I don’t interpret his words as a unilateral command, but as a recognition that by simply assuming the standards of the world in all respect, we become like the world, when we are called to become like Him.

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