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 as ...

used for

lending In finance, a loan is the lending of money by one or more individuals, organizations, or other entities to other individuals, organizations, etc. The recipient (i.e., the borrower) incurs a debt and is usually liable to pay interest on that de ...

purposes is the money not used for

consumption Consumption may refer to: *Resource consumption *Tuberculosis, an infectious disease, historically * Consumption (ecology), receipt of energy by consuming other organisms * Consumption (economics), the purchasing of newly produced goods for curren ...

– which means, earning

interest In finance and economics, interest is payment from a borrower 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 ...

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 known as an economist. He was also a government adviser over several decades on economic and social policy on which he wrote extensively. Early life He was born ...

Notes

Interest {{Finance-stub