Loaning as a Mitzvah
Is there a mitzvah to loan money? Many of us would think that the answer is “no” – it’s not real tzedakah, because the person has to give the money back in the end. What is obvious to us is that there is a mitzvah of tzedakah – giving money to a person in need. Surprisingly, however, this mitzvah appears nowhere in the Torah. Look at the following verses that talk about supporting a poor person through financial assistance {source 1-3}. Is the Torah here talking about giving tzedakah or something else?
- Shemot, 22:24 | שמות פרק כב:כד
| אִם כֶּסֶף תַּלְוֶה אֶת עַמִּי אֶת הֶעָנִי עִמָּךְ לֹא תִהְיֶה לוֹ כְּנֹשֶׁה לֹא תְשִׂימוּן עָלָיו נֶשֶׁךְ: | If you lend money to any of my people with you who is poor, you shall not be a creditor to him, nor shall you lay upon him interest |
2. Vayikra, 25:35-38 | ויקרא פרק כה:ל”ה-ל”ח
| (לה) וְכִי יָמוּךְ אָחִיךָ וּמָטָה יָדוֹ עִמָּךְ וְהֶחֱזַקְתָּ בּוֹ גֵּר וְתוֹשָׁב וָחַי עִמָּךְ: (לו) אַל תִּקַּח מֵאִתּוֹ נֶשֶׁךְ וְתַרְבִּית וְיָרֵאתָ מֵאֱ-לֹהֶיךָ וְחֵי אָחִיךָ עִמָּךְ: (לז) אֶת כַּסְפְּךָ לֹא תִתֵּן לוֹ בְּנֶשֶׁךְ וּבְמַרְבִּית לֹא תִתֵּן אָכְלֶךָ: (לח) אֲנִי ה’ אֱ-לֹהֵיכֶם אֲשֶׁר הוֹצֵאתִי אֶתְכֶם מֵאֶרֶץ מִצְרָיִם לָתֵת לָכֶם אֶת אֶרֶץ כְּנַעַן לִהְיוֹת לָכֶם לֵא-לֹהִים: | [35] And if your brother has become poor, and his means fail with you; then you shall cause him to be strengthened; though he may be a stranger, or a sojourner; that he may live with you. [36] Take no interest from him, or increase; but fear your God; that your brother may live with you. [37] You shall not give him your money for interest, nor lend him your food for profit. [38] I am the Lord your God, who brought you out of the land of Egypt, to give you the land of Canaan, and to be your God. |
3. Devarim, 15:7-11 | דברים פרק טו:ז’-י”א
| (ז) כִּי יִהְיֶה בְךָ אֶבְיוֹן מֵאַחַד אַחֶיךָ בְּאַחַד שְׁעָרֶיךָ בְּאַרְצְךָ אֲשֶׁר ה’ אֱ-לֹהֶיךָ נֹתֵן לָךְ לֹא תְאַמֵּץ אֶת לְבָבְךָ וְלֹא תִקְפֹּץ אֶת יָדְךָ מֵאָחִיךָ הָאֶבְיוֹן: (ח) כִּי פָתֹחַ תִּפְתַּח אֶת יָדְךָ לוֹ וְהַעֲבֵט תַּעֲבִיטֶנּוּ דֵּי מַחְסֹרוֹ אֲשֶׁר יֶחְסַר לוֹ: (ט) הִשָּׁמֶר לְךָ פֶּן יִהְיֶה דָבָר עִם לְבָבְךָ בְלִיַּעַל לֵאמֹר קָרְבָה שְׁנַת הַשֶּׁבַע שְׁנַת הַשְּׁמִטָּה וְרָעָה עֵינְךָ בְּאָחִיךָ הָאֶבְיוֹן וְלֹא תִתֵּן לוֹ וְקָרָא עָלֶיךָ אֶל יְקֹוָק וְהָיָה בְךָ חֵטְא: (י) נָתוֹן תִּתֵּן לוֹ וְלֹא יֵרַע לְבָבְךָ בְּתִתְּךָ לוֹ כִּי בִּגְלַל הַדָּבָר הַזֶּה יְבָרֶכְךָ ה’ אֱ-לֹהֶיךָ בְּכָל מַעֲשֶׂךָ וּבְכֹל מִשְׁלַח יָדֶךָ: (יא) כִּי לֹא יֶחְדַּל אֶבְיוֹן מִקֶּרֶב הָאָרֶץ עַל כֵּן אָנֹכִי מְצַוְּךָ לֵאמֹר פָּתֹחַ תִּפְתַּח אֶת יָדְךָ לְאָחִיךָ לַעֲנִיֶּךָ וּלְאֶבְיֹנְךָ בְּאַרְצֶךָ: | [7] If there is among you a poor man of one of your brothers inside any of your gates in your land which the Lord your God gives you, you shall not harden your heart, nor shut your hand from your poor brother; [8] But you shall open your hand wide to him, and shall surely lend him sufficient for his need, in that which he lacks. [9] Beware that there be not a thought in your wicked heart, saying, The seventh year, the year of release, is at hand; and your eye be evil against your poor brother, and you give him nothing; and he cry to the Lord against you, and it be sin to you. [10] You shall surely give him, and your heart shall not be grieved when you give to him; because for this thing the Lord your God shall bless you in all your works, and in all that you put your hand to. [11] For the poor shall never cease out of the land; therefore I command you, saying, You shall open your hand wide to your brother, to your poor, and to your needy, in your land. |
All these passages deal with the obligation to lend money, not to give it. The passage from Shemot speaks explicitly about lending money – and not charging interest- but does not command us to do so. The verses in Vayikra likewise speak about not charging interest but here they command us “you shall cause him to be strengthened… so that he may live with you.” The mitzvah to help support someone who is faltering, these verses make clear, is through loans, not through gifts of money.
The verses from Devarim on the other hand, are those most often quoted regarding the mitzvah of tzedakah (“open your hand,” “according to his needs”) – but it is clear that the simple sense of the verse is referring to lending money. The verb is תעביטנו, which comes from the root עבט, which means a collateral. And the entire context is one of making a loan, which will be annulled in the Shmitta year, and not refusing to lend money because of this.
All these verses assume that the person asking for a loan is a poor person. This means not only are loans the primary way to support the poor, over gifts, but also that those who are not poor would not by and large – in the time of the Torah – be asking for loans.
***
It is that the pshat of the verses is that there is a mitzvah to lend money, and nowhere in the Torah do we find a mitzvah to give money to a poor person. The Torah does have the mitzvah to leave the gleanings of the harvest and the corner of the fields to the poor, and there is a tithe to the poor twice every seven years. But when a poor person comes to ask for assistance, the only mitzvah that is explicit in the Torah is to lend him money, not to give it to him.
Nevertheless, Hazal read the verse to also (or even primarily) to be referring to a mitzvah to give money, as can be seen from Rambam {source 4}. Notice how Rambam – following the Gemara –quotes all the verses above, but skips over the parts of the verses that refer to lending money, allowing them to be read without that context.
4. Rambam, Laws of Gifts to the Poor, 7:1-2 | רמב”ם הלכות מתנות עניים ז:א’-ב’
| [א] מצות עשה ליתן צדקה לעני ישראל כפי מה שראוי לעני, אם היתה יד הנותן משגת, שנאמר פתוח תפתח את ידך לו ונאמר והחזקת בו גר ותושב וחי עמך ונאמר וחי אחיך עמך. [ב] וכל הרואה עני מבקש והעלים עיניו ממנו ולא נתן לו צדקה עבר בלא תעשה שנאמר לא תאמץ את לבבך ולא תקפוץ את ידך מאחיך האביון. | [1] It is a positive mitzvot to give tzedakah to the poor of the Jewish People, according to what is appropriate for that poor person, if the giver has the capacity to give (to that extent), as it says, “You shall surely open your hand to him” (Devarim 15:8) and it says “And you shall cause him to be strengthened, the sojourner and the resident, and he shall live with you,” (Vayirka 25:35) and it says, “And your brother shall live with you.” (Vayirka 25:36). |
Although the verses are read to be referring to a mitzvah of tzedakah, Hazal also read them according to their pshat meaning, and stated that there is a mitzvah to lend money, as can be seen from Rambam {source 5}. Notice how Rambam states that this is even a bigger mitzvah than tzedakah. What reason does he give for that?
5. Rambam, Laws of Lending and Borrowing, 1:1 | רמב”ם הלכות מלוה ולוה א:א
| מצות עשה להלוות לעניי ישראל שנאמר אם כסף תלוה את עמי את העני עמך, יכול רשות תלמוד לומר העבט תעביטנו וגו’ ומצוה זו גדולה מן הצדקה אל העני השואל שזה כבר נצרך לשאול וזה עדיין לא הגיע למדה זו, והתורה הקפידה על מי שימנע מלהלוות לעני שנאמר ורעה עינך באחיך האביון | It is a positive mitzvah to lend money to a poor person from Israel, as it says, “If you lend money to my people, to the poor among you.” Perhaps it is only a choice? The verse teaches, “You shall surely lend him”. And this mitzvah is greater than tzedakah to the poor person who is beg, because this [latter person] already is in a situation where he must beg, while this [former person] has not yet fallen into that category. And the Torah is very exacting against one who holds back from lending to the poor person as it states, “And you will look evilly against your brother, the poor person…” (Devarim 15:9). |
Rambam – basing himself on the Gemara – says that it is a bigger mitzvah to lend money than to give tzedakkah. The reason he gives is that a loan is given to someone who has not yet fallen on such hard times that he needs to ask for charity. This could be understood in two ways, (1) the person can be supported while still preserving his dignity and (2) support coming at this time will be more helpful than support coming later. Both of these reasons point to why the Torah speaks only of loans and not of tzedakkah. We now turn to explore this point further.
Why is Loaning a Good Way to Provide Support?
Nature of Lending in the Torah
Why would the Torah emphasize loaning money as the way of providing support for those in need? Isn’t it better someone to receive a straight-out gift? He could use the money to feed his family and pay the rent without having to worry about how he will repay it. Lending money is problematic for another reason: the lender has power over the borrower: “The borrower is servant to the lender” (Mishlei 22:7). Why then is it to be preferred?
To answer this, it is important first that we look at the nature of lending in the Torah. As we saw above {sources 1-3} it was only the poor who asked for loans. In an agricultural society, people were either successful, and then didn’t need loans, or their crops failed, and they would need to borrow money to feed their family and to buy seed for the coming year.
This is why the Torah commands that no interest be charged. This eliminated one of the biggest problems with borrowing: the poor person getting deeper and deeper into debt. This restriction makes no sense from an economic perspective; there is no incentive to lend and the lender is not receiving anything for his giving up the money for his own use. But it makes sense from an obligation to help the poor person who is asking for the loan. To help them, we must give up the interest we would have charged. This type of lending, then, is actually a form of tzedakah.
This is also why debts are annulled at the end of the Smittah year, to provide relief for the poor. In combination with no interest, this meant that a poor person could not lose money by taking a loan, and if he couldn’t pay the money back, eventually the debt would be annulled. This would effectively convert the entire loan into a gift, that is, into tzedakah in the classical sense.
Why is Lending a Better Way to Provide Support?
If lending according to Torah law is a type of tzedakah, then why not give tzedakah outright? We mentioned above two possible reasons, one moral and one economic. We explore them more deeply here.
The moral reason is one of preserving dignity. When a person is reduced to asking for alms, he is immediately seen—by himself and others—as someone living off the generosity of others, someone who can’t pay his own way, a ward of society rather than a member.
The Talmud recognized the loss of dignity that comes with asking for money and cautioned people to go to great lengths to avoid having to do so {source 6}.
6. Pesachim 113a | (.פסחים (קיג
| ועשה שבתך חול ואל תצטרך לבריות | And treat your Sabbath like a weekday rather than be dependent on your fellow-beings |
Rashi directly connects the reason of dignity to the preference to lend rather than to give. We have seen that Rambam prioritized lending over giving, and this was based on the passage in Shabbat {source 7}. How does Rashi {source 8} explaining this?
7. Shabbat , 63a | בבלי מסכת שבת דף סג עמוד א
| ואמר רבי אבא אמר רבי שמעון בן לקיש: גדול המלוה יותר מן העושה, צדקה, ומטיל בכיס יותר מכולן. | R. Abba also said in the name of R. Simeon b. Lakish: He who lends [money] is greater than he who performs charity; and he who forms a partnership is greater than all. |
8. Rashi, Shabbat 63a | (.רש”י שבת דף (סג
| גדול המלוה – לפי שאין העני בוש בדבר | Greater is he who lends – because the poor person is not embarrassed in the matter. |
Rashi states that loans are better than gifts because there is no (or much less) embarrassment in asking for a loan than for a straight handout. Notice how this concern of dignity and embarrassment plays out in the Talmudic discussion below regarding how to best support a poor person while being concerned for his dignity {source 9}. What does the Talmud mean regarding making a loan into a gift?
9. Bavli Ketuvot 67b | (:בבלי, כתובות (סז
| תנו רבנן: אין לו ואינו רוצה להתפרנס, נותנין לו לשום הלואה וחוזרין ונותנין לו לשום מתנה, דברי רבי מאיר; וחכמים אומרים: נותנין לו לשום מתנה וחוזרין ונותנין לו לשום הלואה. לשום מתנה הא לא שקיל! אמר רבא: לפתוח לו לשום מתנה. יש לו ואינו רוצה להתפרנס, נותנין לו לשום מתנה וחוזרין ונפרעין ממנו. חוזרין ונפרעין הימנו, תו לא שקיל! אמר רב פפא: לאחר מיתה. ר”ש אומר: יש לו ואינו רוצה להתפרנס – אין נזקקין לו, אין לו ואינו רוצה להתפרנס – אומרים לו הבא משכון וטול, כדי שתזוח דעתו עליו. ת”ר: העבט – זה שאין לו ואינו רוצה להתפרנס, שנותנים לו לשום הלואה וחוזרין ונותנין לו לשום מתנה, תעביטנו – זה שיש לו ואינו רוצה להתפרנס, שנותנין לו לשום מתנה וחוזרין ונפרעין הימנו לאחר מיתה, דברי ר’ יהודה וחכ”א: יש לו ואינו רוצה להתפרנס – אין נזקקין לו, ואלא מה אני מקיים תעביטנו? דברה תורה כלשון בני אדם | Our Rabbis taught: If a man has no means and does not wish to be maintained [out of the poor funds] he should be granted [the sum he requires] as a loan and then it can be presented to him as a gift; so R. Meir. The Sages, however, said: It is given to him as a gift and then it is granted to him as a loan. As a gift? He, surely, refuses to take [gifts]! Raba replied: It is offered to him in the first instance as a gift. If he has the means but does not want to maintain himself, [at his own expense], he is given [what he needs] as a gift, and then he is made to repay it. If he is made to repay it he would, surely, not take again! — R. Papa replied: [Repayment is claimed] after his death. R. Simeon said: If he has the means and does not want to maintain himself [at his own expense], no one need feel any concern about him. If he has no means and does not wish to be maintained [out of the poor funds] he is told, “Bring a pledge and you will receive [a loan] in order to raise his [drooping] spirit.” Our Rabbis taught: “To lend” refers to a man who has no means and is unwilling to receive his maintenance [from the poor funds] to whom [the allowance] must be given as a loan and then presented to him as a gift. “Thou shalt lend him” refers to a man who has the means and does not wish to maintain himself [at his own expense] to whom [the allowance] is given as a gift and repayment is claimed from his [estate] after his death, so R. Judah. The Sages, however, said: If he has the means and does not wish to maintain himself [at his own expense] no one need feel any concern about him. To what, however, is the text “Thou shalt lend him” to be applied? The Torah speaks in the language of men. |
The first opinion quoted in this passage advises giving a poor person a loan to help him preserve his dignity, but then to convert it into a gift, that is, to tell the poor person at a later date that he need not repay the loan. The need for this is that the Shmitta year might be far off, and, regardless, once the pruzbol was instituted, the loan would not be annulled. The problem with this, though, is that it still leaves the person with a sense of having received charity or not living up to his obligations. What follows are different opinions dealing with how to balance these two goals – dignity and support, ranging from emphasizing the gift option up front, to maintaining it as a loan throughout, to positions in-between. What is clear is that one of the significant benefits of a loan over a gift is that it helps the person in need preserve his dignity.
***
Can the concern for dignity also explain why the Talmudic passage we quoted earlier {source 7} states that it is better for a person to enter into a business venture with the poor person over giving him a loan? See how Beit Yosef {source 10} explains that this preference is based on a concern for dignity as well. What irony emerges from this Beit Yosef?
10. Beit Yosef, Yoreh Deah, 249 | בית יוסף יורה דעה סימן רמט
| בפרק במה אשה (שבת סג.) אמר רבי אבא אמר ר”ל גדול המלוה יותר מן העושה צדקה ומטיל לכיס יותר מכולם ופירש רש”י לפי שאין העני בוש בדבר… והטעם שמטיל לכיס יותר מכולם מפני שהמלוה מעות לחבירו בלא ריוח הלוה בוש שהוא נהנה מחבירו בדבר שאין חבירו נהנה כלל אבל במטיל מלאי אינו בוש כלל מאחר ששניהם נהנים. | In the chapter Baameh HaIsha (Shabbat 63a), “R. Abba also said in the name of R. Simeon b. Lakish: He who lends [money] is greater than he who performs charity; and he who forms a partnership39 is greater than all.” And Rashi explains there that this is because the poor person is not embarrassed… And the reason that one who does business with the poor person is greater than them all, is because one who lends money to his friend without any benefit to himself, in such a case the borrower is embarrassed, for he benefits from his friend in a matter which his friend does not benefit at all. But if one does business with him, in such a case he is not embarrassed at all, since both of them benefit |
For Beit Yosef, a partnership is better than a loan, because a loan without interest only benefits one party. There is real irony here. The benefit of lending money over giving it is that it preserves the borrower’s dignity. But the Torah’s mitzvah to not charge interest make loans more like tzedakkah, and this means that even loans will entail some compromise of dignity for the borrower.
***
Take a look at how this concern played out in the early years of the Hebrew Free Loan Society at the turn of the century, which was set up to help the immigrant Jewish population in America {source 11}. What solution did some of the local chapters arrive at? What halakhic problem was there with this solution?
11. “Emergence of Hebrew Free Loan Societies,” Shelly Tenenbaum, Social Science History Association, 13:3 (1989), pp. 228-229.
Julius Goldman of New Orleans was one who vigorously defended the practice of charging interest:
[National Conference of Jewish Charities, 1914: 12] A representative of the Jewish Loan Association of St. Louis added that one of the first questions to arise for his organization was whether or not to charge interest:
|
The solution that some chapters arrived at was to charge interest. This practice was not consistent with halakha, going against the mitzvah to not charge interest, which is what made the loans more like charity. A similar practice, however, can be done in a halakhically acceptable way through a heter iska, a device that frames a loan as a partnership and thus allows for the collection of interest. A heter iska is normally understood as a device that serves the interests of the lender; what we see here is that by making something a business transaction, the interests of the borrower may be served as well.
***
We have seen the moral reason for lending over giving. But there are economic reasons as well. We have seen that Rambam {source 5} states that what makes loans better is that they are given to someone before he becomes destitute. This need not be a concern of dignity. How does Rashi’s comment {source 12} explain why such assistance is so powerful?
12. Rashi, Vayikra 25:35 | רש”י ויקרא כ”ה:ל”ה
| והחזקת בו – אל תניחהו שירד ויפול ויהיה קשה להקימו, אלא חזקהו משעת מוטת היד. למה זה דומה, למשאוי שעל החמור, עודהו על החמור אחד תופס בו ומעמידו, נפל לארץ, חמשה אין מעמידין אותו: | And you shall cause him to be strengthened – do not allow him to descend and to fall, for then it will be difficult to raise him up. Rather, strengthen him from the moment his hand begins to falter. To what can this be compared? To a burden on a mule. While it is still on the mule, one person can hold on to it and allow the mule to stand, but once the mule has fallen, even five people will not be able to raise it up. |
Rashi explains that money given at a critical juncture – when it can help prevent a collapse of business or enterprise – will have much greater impact than money given after the business has already failed. While this would be true of a gift as well, the reality is that someone who is not yet poor will not ask for a gift. Because the Torah and Hazal prioritize giving loans, this creates the opportunity for the money to come when needed and to be of maximal effect.
This, then, is one economic benefit – maximizing the effect of the money given. It can also be framed as preventing poverty from happening in the first place, as opposed to trying to solve the problem of poverty once it has been allowed to exist. Hazal saw this – the prevention of poverty – as a religious mandate {source 13}, and it is the form of giving that is at the top of Rambam’s famous “eight levels of tzedakah” {source 14}.
13. Taanit, 21a | (.תענית (כא
| אילפא ורבי יוחנן הוו גרסי באורייתא, דחיקא להו מילתא טובא, אמרי: ניקום וניזיל וניעבד עיסקא, ונקיים בנפשין אפס כי לא יהיה בך אביון. | Ilfa and R. Yochanan studied together the Torah and they found themselves in great want and they said one to another, Let us go and engage in commerce so that of us may be fulfilled the verse, Howbeit there shall be no need among you. |
14. Rambam, Laws of Gifts to the Poor, 10:7 | רמב”ם הלכות מתנות עניים י:ז
| שמנה מעלות יש בצדקה זו למעלה מזו, מעלה גדולה שאין למעלה ממנה זה המחזיק ביד ישראל שמך ונותן לו מתנה או הלואה או עושה עמו שותפות או ממציא לו מלאכה כדי לחזק את ידו עד שלא יצטרך לבריות לשאול, ועל זה נאמר והחזקת בו גר ותושב וחי עמך כלומר החזק בו עד שלא יפול ויצטרך. | There are eight levels of tzedakah, each greater than the next. The greatest level, above which there is no other, is to strengthen the name of another Jew who is faltering by giving him a present or loan, or making a partnership with him, or finding him a job in order to strengthen his hand until he needs no longer [beg from] people. For it is said, “You shall strengthen the stranger and the dweller in your midst and live with him,” (Vayikra 25:35) that is to say, strengthen him until he needs no longer fall [upon the mercy of the community] or be in need. |
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There is another economic benefit to lending money over giving it. Gifts of money only address an immediate need but not deeper systemic problems. The gift does not incentivize the person in any way. However, if a person takes a loan, even if it could eventually be annulled, she feels a legal and moral responsibility to pay it back, and this incentivizes her to find ways to invest it and generate new income. This is indeed what happened with Hebrew Free Loan Societies: the majority of loans were borrowed for entrepreneurial purposes, and this led to tremendous economic growth for the entire community {source 15}.
15. Emergence,” pp. 228-229
Finally, an article in a Providence, Rhode Island, newspaper emphasized that the purpose of that city’s free loan societies was “solely to provide means whereby the Jew can start in business for himself” (Providence Sunday Journal, 3 Mar. I912: IO). The reporter contrasted the free loan associations with traditional charities that targeted the indigent: “This does not mean that the member of the race who is pressed for money for other purposes, because of illness or other emergency, is left without possibility of aid from his own people. There are other associations which will help him. The loan associations, however, are designed primarily to assist Jews in business” (ibid.). As we can see, free loan activists frequently discussed the importance of their organizations for financing businesses. The centrality of this theme in their own self-definition corroborates previous evidence of the high percentages of applicants who borrowed for entrepreneurial purposes. |
This value in generating business and new sources of income can also be the reason why the Talmud prefers going into business with a person in need over giving him a loan. Going into business with him generates an ongoing source of income for him, and has benefits for the community at large. The greatest good that a person can do for someone who is out of work is to help him find a job. Like the benefit of loans over gifts, this accomplishes two things – it protects or restores the person’s dignity and sense of self-worth, and it generates income for him for the future, that is, it gets to the root of the problem.
Finally, it should be noted that there is another benefit to lending over giving: if the money is paid back, the same money can be lent out again and again.
Conclusion
We have all internalized the Jewish value of giving tzedakah. We now need to internalize the value of lending money. There are many excellent gemachs, or free loan societies, that a person can give to, and if one does not exist, a person can always start one. More broadly, a search of the web will reveal many ways to be involved in micro-lending, the making of small loans to individuals at low interest to allow them to invest the money and fund new businesses (halakhic issues would of course need to be addressed). The opportunities are there. It is for us to “open our hands and lend what is needed.”
Daf of the Day
