Is Money Lending Good or Bad?

Should People with Down Syndrome have Access to Credit?

Should People with Down Syndrome have Access to Credit?

I am starting this post as a debate over the social benefits – or lack there- of regarding lending. In economic terms a borrower who is cash poor exchanges future income with a lender who is cash rich. The borrower receives needed cash. The lender is reimbursed for the opportunity cost of not having access to the cash over the term of the loan.
Our current system enforces reimbursement of the lender with interest payments.

Islamic Loans

Islam prohibits interest bearing loans. This is called ribaa.
Islamic home loans are structured as purchase and resale transactions with the borrower. The profit on the transaction is non-interest compensation for the loan.

What Does the Bible Have to Say?

My friend and investing student Martin Pierce takes the stance that lending is bad. He points to Christian examples here.

Pre-Modern Wisdom For Postmodern Times

In Marty’s own words,

People in ancient times knew about the economic “evil” called debt, which continues to be one of the biggest problems today. I put the word evil in quotes because sometimes we need to borrow, and we should usually pay interest when we do. The evil side of debt is the fact that it can easily reduce people to ruin.

The jury is out! Chime in with your stance below,

-Doc Brown