…in this process of liberalisation over the centuries, it seems we have forgotten a couple of key principles. If I lend money, the borrower makes a promise to repay. If I lend money to borrowers I believe will probably default, I am inducing people to make promises they will break. Inducing promise-breaking is straightforwardly unethical.<\/p>\n
Again, although short-term high-interest loans may (as Eck and Melanchthon claimed) help people through temporary difficulties without their being forced to liquidate assets (e.g. sell the family car) unnecessarily, if I lend money very short term and at high interest to someone that is already insolvent and that person defaults on other creditors shortly after repaying me, I have profited at the expense of those other creditors. That could be seen as akin to theft \u201d\u201d capturing assets that should rightly be used to repay other loans.<\/p>\n
It could be difficult to regulate lending that induces promise-breaking or that extorts the assets of other creditors without preventing more innocent lending that helps with liquidity or business launching.<\/p>\n