The Mitzvah to Loan
Which Type of Loans did the Torah Command
And although they worked hard for a living – often, people were left without money – either because they had not finished their work, had not yet been paid, or because they could not find a buyer for their goods – and in order to buy food, were forced to ask for a loan. Such people weren’t poor and unable to work - those about whom the Torah commanded us to give tzedakah; they needed a temporary loan that would enable them to get by until they were paid.
On occasion, even a person who was considered wealthy, owned a nice house, fancy clothes, and expensive furniture was left without cash to buy food for his family, and the Torah commanded us to lend him money in his time of need as well. Nevertheless, if a rich and a poor person comes to ask for a loan, the poor person takes precedence, because his situation is more needy, whereas the rich person, if necessary, could sell some of his possessions cheaply in order to survive (Bava Metzia 71a; S.A., C.M. 97:1).
It is important to note that as a result of the rise in living standards, many of the loans people take today are large loans mainly for investment purposes. For example, a loan to buy an apartment so as not to pay monthly rent, or to start a business that will eventually generate profits, or to pay for professional studies enabling one to earn a respectable living. Since this is an investment and not a loan, the lender is entitled to receive a percentage of the profits for his investment. Ideally, it would be appropriate for the lender and the borrower to calculate the profits created as a result of the investment and split the profits as agreed from the beginning between them. However, since such a calculation is very difficult and complex, we rely on the ‘heter iska’ [a halakhically approved way of restructuring a loan or debt so that it becomes an investment instead of a loan](“Peninei Halakha: Shevi’it” 6:3).
Let’s return to the mitzvah of loans, of which the mitzvah of shmittat kesafim is an offshoot.
The goal of the mitzvah is to help the poor who are unable to pay their debts, by creating a process where, once in seven years, they could untangle themselves from the burden of debts they had incurred. The Torah set the expiration date for debts at the end of the seventh year, so they could start the new seven-year cycle free from the yoke of monetary obligations.
The Warning Not to Avoid Lending Mone to the Poor before Shmitta Year
The Mitzvah to Lend Only to Trustworthy People
By even greater force of logic, there is no mitzvah to lend money to a person who is unreliable before the Shmitta year, because the mitzvah is to lend, and not to give as a gift. An unreliable person who asks for a loan preceding the Shmitta is essentially asking for a gift, because if he is unable to pay on time - when the Shmitta year ends, the loan becomes a gift.
The Solution for High-Risk Loans
When it was not possible to mortgage land or give a pledge for the repayment of the debt but nevertheless the borrower was trustworthy in the eyes of the lender, the lender would give the bill of debt to Beit Din, and in this manner as well, the debt does not expire at the end of Shmitta.
The mitzvah of Shmitta from the Torah applies only when the entire Jewish nation lives in the Land of Israel as required – in other words, every tribe in its inheritance, and every family on its land. Even if all of the Jewish nation lived in Israel but were mixed among themselves – i.e., some of the tribe of Binyamin resided in the inheritance of Yehudah, or vice versa, they are not considered as residing in the land as required, and the obligation of Shmitta from the Torah is annulled (Archin 32b).
The Logic in the Mitzvah
Similarly, the mitzvah to refrain from working the land in the Shmitta year from the Torah applies only when Yovel is observed, because only when all of Israel has land in the country, and they all keep the Sabbatical year, are they able to handle the great challenge of Shmitta. But when only a portion of the people own land, they are unable to bear the burden of Shmitta alone. In addition, when all of Israel does not reside in the land, chances are vacant areas are filled with non-Jews who work their fields for seven years, creating difficult competition for those who do fulfill Shmitta to withstand.
After the tribe of Reuben, Gad and half of Manasseh were exiled from their land, approximately a hundred and fifty years before the destruction of the First Temple, the mitzvah of Shmitta from the Torah was annulled (Archin 32b). Nevertheless, our Sages determined we continue fulfilling the mitzvah. Our Sages also determined that Shmitta be kept during the period of the Second Temple, in spite of the fact that Israel did not merit residing in the land as required, every tribe in its inheritance. And although under such circumstances fulfilling Shmitta was more difficult, our Sages determined we should make a greater effort to keep Shmitta, in order to safeguard the ideals of the mitzvoth, and thus, merit redemption and future fulfillment of the mitzvahfrom the Torah in its entirety.
Towards the end of the Second Temple, the number of poor people requiring loans who failed to repay increased, until the loss was too great for lenders to bear – above and beyond what the Torah and our Sages had intended by means of their enactment. A situation was created where, had the rich loaned their money to all needy people as the Torah commanded, at the end of each Shmitta year when required to cancel all debts, the lenders would have gone bankrupt. This was not the Torah’s intention for the mitzvah of giving loans; for that purpose, the mitzvah of tzedakah, which has a ceiling, was intended. As our Sages said, a person should not give more than a fifth of his assets and wages to tzedakah, so that his financial stability would not be affected (Ketubot 50a).
God willing, next week I will clarify the mitzvah of ‘shmittat kesafim’ and the ‘pruzbul’ in practice.