I am curious if anyone has experience providing individuals in financial trouble with interest-free loans as a ministry of benevolence. If so, could you share what you have learned from doing this? Are there legal issues I'm unaware of? I haven't found much on this topic from my cursory skimming of the handful of books I own about diaconal ministry. It seems clear to me this strategy has biblical precedent (Exodus 22:25; Leviticus 25:35-37; Deuteronomy 23:19-20; Psalm 15:5) and fits the call to minister the mercy of Christ (Article 25c of the Church Order).
Here is a hypothetical scenario: A lower income family who relies on government supplements to afford housing has a car accident that sets them back. They get behind on their bills and they need to pay the rent they owe in order to keep their government-provided benefits. The deacons hear their story with compassion and encourage them in the plan this family has put together to get out of their pickle. If the deacons pay the landlord $600 from their benevolence fund and treat this as an interest-free loan to the family, who agrees on it back at $50 a month over 12 months, this family could get back into a situation where they can make ends meet.
One question I think we need to answer right away is what we will do if they tell us they are unable to make the payments we have agreed upon. There must be other things I'm not thinking of. I would appreciate your questions or comments.