I had a friend who lent her friends mom quite a bit of money. The lady was not paying her back.She would not bother her too often about repaying but would bring it up from time to time. After a while, she really needed the money herself. She started to ask a little more often. She told her friend, the girl who's mother it was but that was no help at all. She seemed to only get a few dollars here and there and a whole bunch of promises and excuses. Finally it got so bad that the friendship between my friend and this girl was lost.
I say if a friend is in need of money, only give it if you are willing to be ok with it being more of a gift. If you can part with it and not expect it back it may save a relationship. If you cannot afford it, be honest and say I wish I could help out but I can't at the moment.