So lending should not extend beyond friends and family? Not sure if that's a good strategy for a society. I bet a society with lending beyond that small circle is more effective at allocating resources. 

 Why start with a false premise? 

 If there is no profit in lending, there will be less lending. Explain it to me where I got it wrong. 

 How does not making a profit relegate an activity "only to friends and family"?  

 Would you lend to strangers for free? Yes, some would but some would abuse that and resources would flow from gullible people to psychopaths.