Is there a difference between gemachs regarding interest
Question
Shalom,
Is there a difference between the Central Gemach and the Osher VeKavod Gemach regarding interest?
Answer
Shalom u’vracha,
There is no difference in the actual loan itself, only in the “Zikaron Devarim” (memorandum of understanding) document used by the Osher VeKavod Gemach, which is more mehudar (conducted in a more meticulous halachic manner).
Source
The Osher VeKavod Gemach conditions receiving the loan on signing a “Shtar Zikaron Devarim” (memorandum document) in their wording. There they come to resolve a problem that exists in those gemachs that are based on the heter that the interest is not given from the borrower to the lender, i.e., where the father pays the interest so that the gemach will lend to his children. Many people ask that the son take the loan from the gemach and give it to them. Now, although from the strict halachic perspective there is no problem, since the gemach does not recognize the father as the borrower, and if the son does not pay the debt the gemach will turn only to him, and no arguments that in fact the father is the borrower will help – therefore there are really two separate loans: between the gemach and the son, and between the son and his father. Nevertheless, there is a concern of ribit mukdemet (advance interest) between the son and the father, for the father has paid interest to the one who will give the son the loan, in order that the son should lend to him. To solve this, the Osher VeKavod Gemach resolved the problem with a “Shtar Zikaron
Devarim”, in which it is written that all the obligations the father undertakes for the sake of the wedding are considered as assistance in repaying his debts. Then there is no loan at all between father and son: the son takes the loan for his own wedding needs, and the father, who at the time of finalizing the shidduch undertook to pay his debts, assumes an obligation that does not have the status of a loan. The problem will arise if the father asks one son to take a loan for the wedding of another son, for in such a case there is certainly a loan between father and son, since the son did not take the loan for his own needs, but only for the needs of his father.
