Interest-free loans steeped in religious tradition


In tough economic times, a centuries-old financial lifeline might be one of the best-kept secrets in the Jewish community.

It is a secret whose roots go back to the Torah, where it is called an act of “loving kindness.”

When rent is due or tuition is short, there are loans available for thousands of dollars — interest free.

The programs are part of a tradition in the Jewish community of offering loans without interest to people in need. The money has helped families adopt babies, a woman buy a pacemaker, and immigrants start a new life.

“I was going to Israel, and I just needed some extra money,” said Yaron Gola of Northeast Philadelphia. “It was a tremendous blessing. It makes you feel a part of a community.”

About 50 groups in the United States and abroad lend millions in interest-free loans each year, said Mark Meltzer, past president and cofounder of the International Association of Hebrew Free Loans.

In the region, the Hebrew Free Loan Society of Greater Philadelphia in Elkins Park and the Chaya Mushka Lubavitcher G’Milus Chesed in Northeast Philadelphia are two of the independent organizations that carry on the tradition. Both provide loans in the five-county Philadelphia area. The Elkins Park group also serves South Jersey.

Jewish nonprofit groups also offer small interest-free loans, often for educational pursuits.

It is viewed as a mitzvah, a good deed, said Rabbi Zalman Lipsker, director of the Lubavitcher fund. In fact, G’Milus Chesed translates to “deed of loving kindness” in Hebrew.

Among the international groups, some limit the loans to members of the Jewish community; others are nonsectarian.

The Elkins Park and Northeast Philadelphia organizations make loans mostly to people who are Jewish. The Elkins Park group makes exceptions for people who aren’t Jewish but who are connected to the Jewish community. For example, it might lend to employees of a Jewish organization.

The underlying principle goes back to biblical instruction, said Rabbi Aaron Landes, founding rabbi of the Hebrew Free Loan Society of Greater Philadelphia and rabbi emeritus of Beth Sholom Congregation, the society’s headquarters.

Exodus 22:25 says, “If you lend money to one of my people among you who is needy, do not be like a moneylender; charge him no interest.” Similar instructions are in Deuteronomy and Leviticus.

Other ethnic and religious groups have their own loan programs. Some mosques in Philadelphia offer interest-free loans to their members.

Interest is prohibited in Islamic law and references to the law appear in the Quran and in statements of the prophet Muhammad, said Masood Ghaznavi, professor emeritus at Rosemont College.