So Alice and Bob want to borrow money. Alice has a job and Bob would have a job if only I lent him some money to get to that work place.

Should I lend to Alice or to Bob? If Bob is offering me more in return, I would obt for Bob but for Alice otherwise. With Bob I might need more scrutiny to decide if I would facilitate getting to that job or if the money would not contribute to getting a job at all but for some extra return, it might be worth it.

I don't know, if you cannot account for risk in your lending business, I don't see much business. 

 I think the idea is that lending shouldn't be a business. 

 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.