Loans & Interest in the Pentateuch
The Torah and Talmud encourage the granting of loans, but only if it doesn't involve interest, with certain exceptions. Charging interest is classed in the Book of Ezekiel as being among the worst sins, and is forbidden according to Jewish law. The Talmud dwells particularly on Ezekiel's condemnation of interest, where Ezekiel denounces it as an abomination, and metaphorically portrays usurers as people who have shed blood.
Land of Israel
The Torah expresses regulations against the charging of interest in the Exodus 22:25-27, Leviticus 25:36-37 and Deuteronomy 23:20-21.
In Leviticus loans themselves are encouraged, whether of money or food, emphasizing that they enable the poor to regain their independence, but, like the other two places in the Bible, forbids the charging of interest on the loan.
All three places state that the charging of interest is exploitative. In Exodus and Deuteronomy it is clear that it would be acceptable to charge interest on any loan to a non-Jew.
Evidently the concept of secured loans existed, as Exodus expressly prohibits using a particular garment as the security. The garment in question was a large cloth square, which the poor used for sleeping within, and hence the garment was needed to survive the cold nights; had it been offered as security, then this would have put at risk the very life of the debtor.
The Deuteronomic verse expresses a similar concern for the security of the debtor's life, but rather than prohibiting a particular garment from becoming the security for a loan, prohibits instead the use of a millstone. The millstone was used to make flour, and hence would be required for the manufacture of bread - a staple food among the poor; had the millstone been offered as security, the debtor would have been at risk of starvation.
Most early religious systems in the ancient Near East, and the secular codes arising from them, did not forbid usury. These societies regarded inanimate matter as alive, like plants, animals and people, and capable of reproducing itself. Hence if you lent 'food money', or monetary tokens of any kind, it was legitimate to charge interest. Food money in the shape of olives, dates, seeds or animals was lent out as early as c. 5000 BC, if not earlier. ... records indicate rates of 10-25 percent for silver and 20-35 percent for cereals.
Among the Mesopotamians, Hittites, Phoenicians and Egyptians, interest was legal and often fixed by the state.
Among the Sumerians, loans were usually given with interest attached, at the rate of 20% per annum; this interest rate is almost always the one stated in surviving Sumerian contract tablets, and was evidently still well known in first century Judaism, as it is the first interest rate to which the Babylonian Talmud refers.
A more mutually profitable arrangement existed in Sumerian law, by which a lender and a debtor make contractual arrangements to become partners in a business venture, with the lender agreeing to invest in the venture, and the debtor agreeing to manage the venture; the contract thus has characteristics of both a loan and a trust, as the lender's financial share in the venture is effectively the return on the loan, and the debtor's financial share in the venture is effectively a wage.
The Code of Hammurabi contains regulations attempting to govern the use of these contracts.
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