Although the history of lending online is short, the true history of the practice stretches back thousands of years into our collective past. It’s a fascinating story of how we got here today – exactly why the team wants to look a little closer at the subject!
So, what made borrowing what it is today? The ups and downs are many and political – and religious – power has played a huge role in shaping how we request and receive extra money when we need it most.
The past might surprise you, so keep scrolling!
Rome: Lending as we know it
Rome has been many things in the eyes of historians, and one of the most critical of these is its role in establishing formal and widespread lending practices. The notion of a banking system was brought to being and provided by either private citizens or what were essentially pawnbrokers.
This access to funding proved a boon to the economy of Rome, with farmers now being able to receive the capital they needed to purchase and plant crops to their best effect. Repayments varied, with farmers opting commonly to meet their repayment obligations come harvest time. This led to a natural cycle of lending and repaying that was based around the agricultural calendar.
While we can’t speak for every lender in Roman times, the most common form of the loan was a secured one, with involved parties pledging their belongings and property as collateral. Better hope those crops grow!
The Middle Ages: Religious influence
This period of time saw, among many other things, a sudden and comprehensive regulation of lending based on religion. Due to perceived moral issues, Christians were flatly forbidden from lending to others and charging them interest.
Interestingly, the Jewish population was excluded from this. Jews were allowed to lend with interest, but only to non-Jewish applicants. This proved exceptionally profitable for Jewish lenders, but also led to the poor perception – and often persecution – of Jewish lenders as being predatory within the industry.
As a nice-to-know note, the term bank hails from this period. Lenders would sit on ‘bancas’ – hence the word bank – and would destroy their bench upon retirement, leading to the word bankrupt.
Fast-forward to 200 years ago
The 1800s saw more formalised and sophisticated lending in the western world, with institutions and loan associations cropping up in countries like America and areas such as Europe. Access to lending for the common citizen, such as was available through the American Philadelphia Savings Fund Society, resulted in more social mobility and a generally increased quality of life.
A data-driven world
It took us a long time to get to credit scores! Previous lending institutions did just fine without them, but the ‘game’ of lending has always been about accurately understanding a prospective borrower.
Knowing more about customers allows a lender to offer a competitive and fair service, and it was the rise of banking cards in the 50’s and the explosion of electronic data gathering made possible in recent years that led to the systems we know today.
Our connected future
Today, of course, those seeking funding are fortunate to have access to great online systems like ours! There’s no waiting for harvest and sowing months where digital services like those offered by the Everyday Loans family are concerned. Convenience is possible, and it’s a lovely thing to have.
If you are seeking financial assistance to get through the months ahead and achieve your goals, look no further than our website main page. We hope you enjoyed today’s blog; do stop by again for more interesting and informative articles from the Everyday Loans team.