The Torah prohibition of Ri’bitt, lending money on interest, applies only to loans given to Jews; Torah law allows taking interest on loans given to gentiles. The question, however, arises as to whether or not it is proper to regularly lend money to gentiles. Even though the Torah allows lending gentiles on interest, is it preferable for a Jew to refrain from doing so on a regular basis?
Rabbi Moshe Halevi (Israel, 1961-2001), in his work Milveh Hashem (p. 231), writes that the Sages enacted a prohibition against lending money on interest to gentiles, except for the purpose of earning a basic livelihood. If a Jew already has gainful employment and wishes to lend money to acquire greater wealth and increase his assets, he may not lend money on interest, even to gentiles. Money-lending to gentiles is permissible only if one does so in order to earn a living. The reason for this enactment, Rabbi Moshe Halevi explains, is the concern that money-lending may result in excessive social interaction between Jews and gentiles. In order to minimize such interaction and thereby prevent Jews from seeking to emulate gentile practices, the Sages legislated that one should not lend money to gentiles as a business venture unless he must do so to earn a basic livelihood.
Of course, as Rabbi Moshe Halevi observes, Jews living in the Diaspora in any event engage professionally with gentiles on a regular basis, and are therefore already exposed to the lifestyle of non-Jews. Therefore, he writes, the aforementioned enactment of the Sages applies only in Israel, where it is possible to deal commercially with only Jews, and one should therefore refrain from money-lending to gentiles to increase one’s assets. In the Diaspora, however, where Jews in any event must interact with non-Jewish associates, Halacha permits lending money on interest to gentiles, even for the purpose of increasing one’s wealth.
Summary: Jews living in Israel should not lend money on interest to gentiles unless this is necessary for one to earn a basic livelihood. In the Diaspora, however, it is permissible to lend money to gentiles on interest even if one is already gainfully employed.
