According to Wikipedia “Usury is the practice of making unethical or immoral monetary loans that unfairly enrich the lender.” Some people went further. Historically, or rather religiously, even taking interest was frowned upon, to say the least. The image above depicts Jesus as he expells the usurars from the temple.
“Thou shalt not give him thy money upon interest, nor give him thy victuals for increase.” (Leviticus 25:37 in the Old Testament)
“And if you lend to those from whom you expect repayment, what credit is that to you? Even sinners lend to sinners, expecting to be repaid in full.” (Luke 6:34 in the New Testament)
“O you who believe, you shall not take usury, compounded over and over. Observe God, that you may succeed.” (Al-‘Imran 3:130 in the Qur’an)
To sum it up: usury was a no go, interest taking was frowned upon and a call for debt relief was issued in a number of ancient societies.
Debt forgiveness is mentioned in the Book of Leviticus, in which God councils Moses to forgive debts in certain cases every Jubilee year – at the end of the last year of the seven year agricultural cycle or a 49-year cycle, depending on interpretation.
Debt forgiveness was also found in ancient Athens, where in the 6th century BC, the lawmaker Solon instituted a set of laws which canceled all debts and retroactively canceled previous debts that had caused slavery and serfdom, freeing debt slaves and debt serfs.
In addition, the Qur’an supports debt forgiveness:
If the debtor is in difficulty, grant him time till it is easy for him to repay. But, if ye remit it by way of charity, that is best for you if ye only knew. (Qur’an 2:280 )
But how is this related to microfinance? Interest rates lower than from informal moneylenders, suicides of credit defaulters, debt relief are just a few hints.
(photo by lds.org)