The Rebbe's guidance on free-loan funds (gemach) and acts of kindness (gemilus chasadim):
Kindness is G-d's own trait. Gemilus chasadim is a core Divine attribute, and strengthening mutual help unites and blesses a community (IK 7203). Acts of kindness elevate both the giver and the receiver, the way G-d bestows His kindness (IK 2026, 10083). Blessing others brings Divine blessing upon oneself (IK 169). Kindness should be rooted in holiness and unity (IK 8942), and should lead to spiritual growth as well as material help (IK 4125).
Lending surpasses giving. Lending through a gemach can surpass even tzedakah, because it helps a person stand on his own and uplifts both sides (IK 9655, 1622). What we have belongs, in a sense, to others too; lending shares it (IK 3286). Supporting a free-loan fund is an enduring merit, since it helps others while one's money remains (IK 2480), and funds that lend to rich and poor alike keep the mitzvah going constantly (IK 2417).
Build and support gemachs. Establishing communal gemachs strengthens both material needs and spiritual life (IK 10003, 10179), and expanding them through loans brings merit and hastens redemption (IK 5132). Support communal funds and inspire others to join (IK 2305, 5803, 8574, 5099). Prayer and a gemach are deeply connected (IK 5525). Special times — Elul, Hakhel, Shemitah — call for more gemilus chasadim (IK 6532, 9278, 9557).
Borrowing and repaying. Fulfill financial obligations carefully and on time (IK 557). Heter iska and interest require care from everyone involved (IK 3129).
See also: Tzedakah – How much and how to give; Livelihood – Debt, loans and interest.