History of Hebrew Free Loan Societies
Jewish law prohibits the charging of interest among fellow Jews. During the peak of Jewish immigration to the United States in the late nineteenth and early twentieth century, Jewish free loan societies were formed to offer interest-free loans to Jewish merchants to help them become established in the retail business community. These small Jewish immigrant businesses could not otherwise obtain loans from commercial banks. This financing practice is based on biblical principles, and also helped to combat prevailing anti-Semitism by demonstrating that Jews were not usurers and that they ensured the well being of their own people.
From 1881 to 1928, nearly 2.5 million Jews entered the United States, with the overwhelming majority from Russia and other areas of Eastern Europe. For many Jewish immigrants, access to capital from banks was virtually non-existent and bankers were unwilling to make loans to recently arrived immigrants who generally lacked collateral. Free loan societies were their only source of capital.
The first Hebrew Free Loan Society was founded in Pittsburgh in 1887. That was followed by the founding of Hebrew Free Loan Association of New York City in 1892, with working capital of $95. The San Francisco Free Loan Society was founded by nine members in 1897 who decided to contribute 25 cents a month into a general fund. The Hebrew Free Loan of Detroit began in 1895 in the “back room of a shoemaker’s store. Ten men pledged $50 each and began to lend out money, mostly to peddlers’ needing merchandise.” The Los Angeles Free Loan Society and the Cleveland Free Loan Society were founded in 1904. Dozens more followed in cities like Atlanta, Phoenix, Philadelphia, and Dallas.
History of Hebrew Free Loan of Austin
In January 2011, Tracy Solomon and Dr. Michael Rotman were introduced because they both had the vision to form a Hebrew Free Loan program in Austin, Texas. In the 1950’s, Dr. Rotman’s father had been a recipient of a loan from San Antonio when his father immigrated from Ecuador. Tracy Solomon became interested when she saw a need in the community in 2010 and had heard about the program from her brother Jeff Horowitz, who had been involved with Hebrew Free Loan of Houston for over 25 years. Together Solomon and Rotman, co-founders of HFLA, established the non-profit that year with the help of about 30 families pledging over $50K. HFLA opened for business in the Fall of 2011 and closed the first loan in November of 2011.
Hebrew Free Loan of Austin is a member of the International Association of Jewish Free Loans, a helping hand network of interest-free lending agencies around the world.