The History Of The Loaning Business
The exact origins of the loaning business are not known. Scholars and historians believe that the loaning business has existed since prehistoric times of which very little is documented and known. There are references to the concept of loans in the bible which indicates that it has been prevalent much before the times of Christ. While in ancient times, it wasn’t perhaps a fully fledged business but the concept and practice of loans did exist.
The loaning business had its beginnings in the earliest days of land ownership. Prior to the concept of owning land and thereon wealth, the idea of loan cannot have existed. Once the sense of ownership had been firmly founded in society, loans became a reality.
The earliest documented references of a properly formed loaning business are from the ancient and medieval Green and Roman empires. Wealthy businessmen, traders and landlords would grant loans in the form of either money, items of utility or land and property, to less privileged people. The borrowers, unlike today, would repay the loans in kind. In most cases, they would work for the lender as slaves and repay their debts. The practice was exploitative whereby the lenders would subject the slaves to work for their entire lifetimes and often subjecting more than one generation to pay back the loan. This was the seed of what is now referred to as indentured loans or indentured servitude.
The first form of organized loan business was brought about by the Italians. Moneylenders in Italy and Italians who were settled in other countries would setup their lending shops (known as benches back then) and lend money to whosoever interested. Money was lent on an interest that was preset by the moneylenders. The Italian word for bench is banca from which the term bank has been later derived.
In the 19th century, the loaning business transformed from that of moneylenders and landlords to state run institutions and banks. Over time, private banks came into existence and all present day financial products, banking services and loans came into being.
The last five decades have seen the most rapid evolution of the loaning business wherein new types of loans have come to the fore. Today, loans are available in vastly diverse formats, secured and unsecured, from national banks to private companies like https://www.wonga.ca/ who provide loans across the internet, we’ve come a long way baby – but the age old business model remains the same.
Category: Local History
