Prior to Charity: 10 Facts About the Commandment of Lending

1. It is a positive commandment from the Torah to lend money to someone who needs it, as it is said: "If you lend money to My people" (Exodus 22:24).

2. This directive is one of three places where the Torah uses the term 'if' even though it refers to a commandment that must be fulfilled.

3. The sages stated in Tractate Shabbat (63a) that this commandment is greater than the commandment of charity.

4. Maimonides in his Book of Commandments: "Hashem commanded us to lend to the poor to ease their suffering and provide relief, and this commandment is stronger and more obligatory than any charity commandment, because one who has already revealed his poverty in public and extends his hand for charity, his distress and shame are not like the distress of the hidden poor person, who wants help before his poverty is revealed in public and he is humiliated. Therefore, the commandment of lending takes precedence and is preferable to the commandment of charity, as it shows greater consideration for the suffering of others."

5. Another advantage of the lending commandment over the regular charity commandment is that lending applies to both poor and rich people, while charity is only for the poor. (Sukkah 49b) This means that the kindness expressed in the commandment of lending is more general and comprehensive, affecting all relationship systems between people, while charity is an expression of kindness only toward a certain type of people.

5. The "Chafetz Chaim" in "Ahavat Chesed": "There are two forms of loans, one excellent with no equal, and the other evil. The good loan is that loan whose main purpose is to show kindness to others and help them. And the bad loan is the loan with interest, whose entire purpose is selfish."

That is, one can do almost the same act, lending money to a friend, but when lending without interest the goal is to help, and one fulfills a commandment. And when lending with interest, the goal is to exploit the distress of others and get rich, and this is a serious transgression.

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6. Regarding loans with interest, it is written in the Shulchan Aruch: "Anyone who gives a loan with interest - his assets collapse and it is as if he has denied the Exodus from Egypt and the God of Israel". After all, in the Exodus from Egypt, Hashem taught us ways of life and kindness, and how can a Jew exploit the difficult situation of his friend and his desperate need for money, in order to get rich?! This is nothing but denial of the God of Israel and the Exodus from Egypt.

7. The prohibition of interest is mentioned in the Torah in several places: "If you lend money to My people, to the poor among you, do not be to him as a creditor, do not impose interest upon him". Rashi interprets the word "neshech" (interest) from the language of snake bite. Just as the snake bites "a small wound in his leg and he does not feel it, and suddenly it swells and inflates to his head, so too interest is not felt and not noticeable until the interest rises and depletes a lot of money."

8. Rabbi Shimon Shkop, in his book "Shaarei Yosher," clarifies the reason for the prohibition of interest: "The matter is that the Torah understands human nature - that the commitment to accept fixed interest upon oneself, even though the borrower does it willingly, is a misguided will and as if done without knowledge. He himself does not understand how he is harming himself through interest. For this reason, the Torah called this matter like a snake bite, which for the moment is a mild pain and its end is danger of death. For this reason, the Torah forbade this matter, because although according to the laws of justice there is no theft here, since he does it knowingly, but in the inner essence of the matter there will be an essence of theft."

9. Not only does the lender with interest violate the prohibition, but also the borrower and the witnesses and guarantors, and anyone who participates in this forbidden loan, violates a Torah prohibition.

10. The famous "Heter Iska" (business permit), and its main issue is that it is not a loan at all but a business of partners, one gives money and the other gives work, and then they share the profits. For example, one has money to invest, and the other has a factory, the money owner invests the money in the factory, thereby enabling the factory owner to increase production, and they will then share the profits. And in order not to get involved in accounting difficulties, they determine from the beginning the share of the money giver, that he will earn such and such percentage each year, while the worker will receive the rest of the profits. Indeed, the logic behind "Heter Iska" is clear, there is no reason for the money owner to take cash out of his pocket and finance the worker or the factory, but there is a partnership here that both sides should benefit from.

Rabbi Israel Arnon in a fascinating lecture on the topic: "A Loan of One Dollar"