Log in / Register
Home arrow Business & Finance arrow The art of RF (riba-free) Islamic banking and finance
< Prev   CONTENTS   Next >

Lending to the Enemy

Professor Goldingay also discusses the issue of a Christian lending to the enemy. He states that Jesus (pp) does urge his followers to lend to whomever asks for a loan (Matthew 5:42) and explicitly states that this applies even to enemies and even if you do not expect to gain in any way from the act (Luke 6:34-35). Maccabaeus, a Jewish work from about the same period, which some Christians came to treat as near-canonical, claims that when people start conforming their lives to Moses's (pp) teaching, even if they are by nature greedy, they start lending to the needy without charging interest (2:8).

Business Financing and Relaxation of the Rules of Prohibiting the Charge of Interest

Professor Goldingay states: “I imagine that the ban on charging interest would indeed have been intended for literal implementation, but that in asking about its implications for us in a different social context, we need to look at it in the light of the various aspects of its stated rationale (e.g., in its concern for the poor). In more commercial contexts and in a competitive situation.” Professor Goldingay concludes that “people might charge interest on commercial loans without infringing the principle underlying this teaching.” He further states that through the first millennium of the Common Era, the Christian Church simply affirmed the Old Testament principle that lending with interest was disapproved, on the continuing presupposition that lending was an aspect of care for the needy. But in practice, lending with interest was tolerated, as long as rates were not judged excessive. Where Christians refused to engage in commercial lending, Jewish moneylenders were able to fill the vacuum on the basis of the permission by Deuteronomy to charge interest to foreigners. In the second millennium, commerce began to develop in new ways and the practice of lending with interest became prevalent, despite the church's opposition. In due course, however, in keeping with the usual pattern, the church conformed itself to the secular pattern and provided a theological rationale for it. In the fifteenth century, Italy's public pawnshops developed with Franciscan support to offer loans to the poor more cheaply than those offered by regular moneylenders, charging a very low interest designed simply to cover expenses. In 1516, the Fifth Lateran Council approved these. As years went by, these pawnshops also began to lend for commercial purposes at higher rates.

Feeling unbound by the course of discussion within the medieval church, and perceiving that the Old Testament was concerned with caring for the poor and not with commercial loans, John Calvin[1] removed the ban on lending with interest, with safeguards that predictably were conveniently forgotten. In due course, the Roman Catholic Church also removed its ban on lending with interest.

In conclusion, Professor Goldingay states that as the capitalist world developed, it lost the idea that the point about lending is to be caring toward the needy. In Victorian Britain, the development of the cooperative movement and the building society movement attempted to recover it. In effect, the customers of the co-op (similar to Credit Unions in today's America) were the shareholders, while building societies worked by attracting safe investments from people who hoped eventually to buy a house and lending the money to people who were already in a position to do so.[2]

  • [1] French Protestant theologian who lived from July 10,1509, to May 27, 1564.
  • [2] The Ansar Group started a similar effort in Canada, the Islamic Housing Cooperative; however, its growth was limited because of the lack of liquidity.
Found a mistake? Please highlight the word and press Shift + Enter  
< Prev   CONTENTS   Next >
Business & Finance
Computer Science
Language & Literature
Political science