Years ago I had the privilege of meeting Dr. Muhammad Yunus, the founder of the Grameen Bank in Bangladesh. I talked with him briefly after he spoke at a conference in Washington.
Grameen is a famed success story of economic development among the very poor. The bank makes "microloans," providing capital that helps transform the lives of its borrowers. Since these customers have no collateral and very little income, they're considered too risky and the amounts too small to bother with for traditional banks. With innovative approaches, such as "peer group" lending, Grameen actually ends up with a repayment rate that makes most traditional lenders jealous (their recovery is about 99 percent).
At the time I met Dr. Yunus, I was reading everything I could get my hands on about Islamic banking. (This was pre-Web, when it was still possible to read everything you could find on a given topic.) Because the Quran forbids the charging of interest, Islamic culture has developed alternatives to capital and mortgage lending at interest. (The system isn't as wholly different as you might expect. Very broadly, the Islamic system tends to make the lender much more of a stakeholder.)
My interest in the subject arose from the realization that early Christian teaching, like current Islamic teaching, forbade the charging of interest, which it called "usury." Over time (as discussed in the previous post), the understanding of usury had evolved from meaning the charging of any interest, to the charging of excessive interest. I was trying to learn whether this evolution had been a matter of principle, or if it was merely a frog-in-the-kettle concession to the gods of this age.
Anyway, I got to meet Dr. Yunus. I asked him whether the Grameen Bank was criticized for lending at interest in Muslim Bangladesh. He told me this had never come up, but that the bank was frequently criticized on allegedly religious grounds because more than 95 percent of its loans went to women (something the Quran never suggests is wrong).
He then gave me what seemed like his elevator pitch for the work of the Grameen Bank. He spoke of access to capital as a human right. Of the bank's lending as a vital and necessary way of empowering the poorest of the poor.
I see nothing usurious in the spirit, mission or practice of the Grameen Bank or of other such institutions, such as CDLFs and CDCUs. Nor, for that matter, do I see anything necessarily exploitative in the work of more traditional lenders like the (fictional, but archetypal) Bailey Bros. Building & Loan.
Dr. Yunus' emphasis on empowerment, I think, gets at the essential meaning of usury.
Lending can empower or it can exploit. The former is a good, the latter is evil — the sin of usury. Lending at interest enables lenders to continue their business of empowering. It was in recognition of this that Christians — right around the same time as the modern market economy was developing — began reconsidering the meaning of the prohibition against usury.
Our understanding of the principle changed, but the principle remains. Exploiting debtors is the sin of usury whether it is done by Dante's Ubriachi or by MBNA and its puppets in Congress.
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