He was the first to introduce the innovation that would make the lending system “fair”. According to various scriptures, he was devoted to the financial well-being of his subjects and his realm. Hammurabi was the king who elevated Babylon to its position of prestige. “If a merchant lends grain at interest, for one gur he shall receive one hundred sila as interest (33 percent) if he lends money at interest, for one shekel of silver he shall receive one-fifth of a shekel as interest.” It established standards for different kinds of commercial interactions, including setting interest rates for lending practices. The Code of Hammurabi is the most complete collection of Babylonian laws. But coins weren’t the only innovation to influence the practice of lending. Then, the first coin – the shekel – would be used for lending and for settling debts. Animals would be lent in the same manner, with the borrower returning the animal’s offspring later on. The ancient civilization saw the rise of numerous inventions such as writing, mathematics, astrology and astronomy, the wheel, and our very own consumer loans.Ī Mesopotamian farmer would borrow a single seed, which would yield a plant with hundreds of seeds that the farmer could return to his lender. Nestled between the Tigris and Euphrates river, the fertile land of Mesopotamia gave birth to the first cities in history. But looking back at the past can often offer some explanation to the changes in the present, and where better to begin than in the cradle of human civilization? Planting the seeds of modern-day lending Today, lending institutions find themselves facing an arduous digital transformation challenge. From the very first signs of civilization, lenders have leveraged best practices to survive and prosper in the evolving environment.įrom Mesopotamia, to Greece and Ancient Rome, lending has been going through continuous transformation. Innovation has always been a crucial part of lending throughout the ages.
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