EXOD693 [This verse] is the basis for the positive precept of extending interest-free loans. It is interesting to point out that although the Hebrew word “im” is usually translated as “if,” in this verse, the sages considered it to mean “when.” This interpretation made giving interest-free loans a binding obligation rather than a voluntary act. This positive commandment to lend money to a fellow Jew is one of the examples in Judaism of chesed, an act of loving kindness, as distinct from acts of charity as discussed in chapter nine. These acts were considered to be obligations to which the law prescribed no limits, since chesed was something rendered to people primarily when they were not entitled to it. Maimonides ruled that the interest-free loan is the highest form of charity, being an expression of the biblical commandment “Thou shalt give him [the needy] support” [Leviticus 25:35). Mishneh Torah, Hilkhot Malveh u Loveh, chapter 1, halakhah 1. Charity is something one gives to the poor, whereas an act of g’milut chesed is one that can be directed both at poor and rich alike. To the poor person the interest-free loan represents a chance to establish himself in a craft or business, thus breaking the cycle of poverty. In the case of the rich, the interest-free loan represents a form of assistance during periods of extreme liquidity problems, thus preventing bankruptcy. It is easy to look upon the interest-free loan commanded by the Torah as something pertinent to a primitive agrarian economy, where most financial transactions would be between a neighbor and his fellow farmer, primarily to tide one over for the next harvest. This, however, is not the way the sages saw it. In the course of explaining the ideological basis of the mitzvot, the fourteenth-century Sefer Hachinukh, of Barcelona, comments as follows regarding the interest-free loan: “One who is not a pauper but who needs assistance is actually worse off than one whose poverty is public knowledge and who is used to collecting charity. If we will give [the former] assistance through the interest-free loan, he may be able to earn a livelihood and not become dependent on others [with its resulting degradation].” Mitzvah 56. This explanation was written at a time when the Jews, both in Spain and in other countries, were no longer farmers but were engaged in sophisticated international trade and banking. From the earliest days of Jewish society, the interest-free loan was relevant beyond the needs of an agrarian economy and was not limited to the simple act of making small temporary loans. Irrespective of the country in which Jews lived, the sophistication of its economy, or the particular economic conditions of the Jewish community, these free loans were an integral part of the Jewish economic world. Throughout history and down to the present day, almost no Jewish community in an organized form has ever existed without the free loan as a permanent part of its communal structure.