Because some people are too poor and/or too bad of decisionmakers to get loans. If someone's eating just one potato a day, you loan them money and you know they

Because some people are too poor and/or too bad of decisionmakers to get loans. If someone's eating just one potato a day, you loan them money and you know they're not going to invest it in a business, they are going to buy a second potato to quell the hunger pangs and now they're back where they started but now they owe you a potato + 15% every month. You don't give a handgun to a toddler or a case of whiskey to an alcoholic, for someone who can't ever repay your loan, then it's not ethical to loan to them.