The abstinence theory of interest asserts that the

money Money is any item or verifiable record that is generally accepted as payment for goods and services and repayment of debts, such as taxes, in a particular country or socio-economic context. The primary functions which distinguish money are: m ...

used for

lending In finance, a loan is the tender of money by one party to another with an agreement to pay it back. The recipient, or borrower, incurs a debt and is usually required to pay interest for the use of the money. The document evidencing the debt ( ...

purposes is the money not used for

consumption Consumption may refer to: * Eating *Resource consumption *Tuberculosis, an infectious disease, historically known as consumption * Consumer (food chain), receipt of energy by consuming other organisms * Consumption (economics), the purchasing of n ...

– which means, earning

interest In finance and economics, interest is payment from a debtor or deposit-taking financial institution to a lender or depositor of an amount above repayment of the principal sum (that is, the amount borrowed), at a particular rate. It is distinct f ...

by abstaining from spending makes the funds possible and available for borrowers.EconomyProfessor.com
, Retrieved 2008-05-29 The originator of the theory is

Nassau William Senior Nassau William Senior (26 September 1790 – 4 June 1864), was an English lawyer and economist. He was also a government adviser over several decades on economic and social policy on which he wrote extensively. In his writings, he made early co ...

Notes

Interest {{Finance-stub