The Torah strictly forbids lending or borrowing money on interest, which in Hebrew is referred to as "Ri’bitt." What is the precise definition of this term?
Rabbi Moshe Halevi, in his work "Milveh Hashem" (p. 70), defines ‘Ri’bitt" as any form of compensation rendered in exchange for being allowed to retain a person's money for a period of time. This prohibition is violated whenever a person gives compensation of any kind – monetary or otherwise – for the permission he receives to keep somebody else's money for a period of time. The word "Ri’bitt" relates to the Hebrew word "Ribuy," or "increase," and thus refers to the "increase" of wealth the lender receives in exchange for the loan. The Torah also refers to interest with the term "Neshech," which relates to the Hebrew word for "bite." A person who is bitten loses a part of himself; similarly, one who borrows on interest has to give part of himself in exchange for the time in which he retained the lender's money.
The Sefer Ha'hinuch (anonymous listing of the 613 commandments) elaborates (in Siman 68) on the concepts underlying this prohibition and explains that it is intended to prevent one Jew from "devouring" another's wealth through interest. Interest is generally charged for a relatively small amount but over a prolonged period of time, and thus has the effect of gradually consuming the borrower's assets without his realizing it.
Accordingly, one does not violate the prohibition of "Ri’bitt" unless he pays or accepts compensation for time in which money was retained. If a person in desperate need of cash sells an object or property for well below its market price, neither he nor the buyer transgresses the prohibition of "Ri’bitt." Even though the buyer paid less than he received, this does not constitute "Ri’bitt" since the seller is not giving the additional value in exchange for retaining the buyer's money. This transaction falls under the category of "Mekah U'memkar," buying and selling, rather than lending, and hence no prohibition of " Ri’bitt" is involved in such a case. (See Rabbi Moshe Halevi's "Milveh Hashem," page 77)
Summary: The prohibition of "Ri’bitt" (interest) applies in cases where compensation is rendered for retaining somebody else's money for a period of time. If a person in desperate need of cash sells something for a very cheap price, this does not constitute "Ri’bitt."
