What the Torah says about… Wonga
With Rabbi Garry Wayland.
Wonga, the most prominent of the payday lenders, has been in the news again. In an attempt to take on these companies, which promise short- term loans at very high rates of interest, Archbishop Welby pledged to ‘take them out of business’ by setting up a chain of non-profit credit unions.
The subsequent revelations that his Church’s pension fund had a portfolio which invests in Wonga demonstrated how fraught saving and investing in the modern world are.
What is the Jewish view on Wonga? The Torah (Ex. 22.25, Lev.25.36, Deut. 23.20) expressly forbids lending with interest, and this applies whether the loan is money or material objects, and the prohibition is against the lender, the borrower and the legal parties enabling the transaction. The word used for interest by the Torah is ‘neshech’, linked to the Hebrew word for biting, ‘neshicha’, reflecting how painful interest payments can become, and indeed one of the main criticisms against pay- day lenders is how borrowers can rack up massive interest payments should they run into trouble with repayments.
Lending with interest is a natural thing to do – it is a charge made for the lenders losing the opportunity to do what they want with their own money. Just as it is fair to charge for the use of my services, my skills and my possessions, it is fair to charge for the use of my money.
However, the Torah says: “Do not lend to your brother with interest.” The Jewish people are a family, and just as most people would not imagine lending to a brother with interest, so too we should not charge any Jew interest. Every Jewish community has a free-loan society, known as a Gemach. These organisations, providing loans of not only money but of every object imaginable, from medicines, car seats and phones, are part of the fabric of a community.
They allow those in need to borrow discreetly, with dignity, and fulfil the dictates of the Rambam, who says that the highest form of charity is to give free loans, to allow the needy to become established in business. Becoming financially independent to the point of being able to repay the loan frees them from any hint of humiliation that taking charity entails. By taking interest in the lives of others, caring and relating to our local communities as brothers, hopefully we will see the end of poverty and a time when everyone will have their own ‘wonga’!
• Garry Wayland is Assistant Rabbi at Woodside Park United Synagogue