Existence of Credit and Loans

Introduction 

Credit and loans are often through to be a modern invention of imaginably a few hundred years old. However, loans and credit have been in existence from as early as 1800 B.C, which is several thousands of years ago. Moneylenders are among one of the oldest profession in the economic world, ranging from a cup of sugar to cold harsh cash. Some argue that prostitution is the oldest profession but according to history, money lending is the oldest ( Beattie, 2018). This paper discusses the argument on whether credit and loans existed for centuries or only for a few decades. 

The Existence of Loans and Credit 

According to Beattie (2018), credit and loans existed for many hundred years ago before the invention of money in an official form. It is just that advanced forms of loans and credit have emerged in our contemporary century like plastic credit cards. Loans and credit have existed since the very beginning of sophistication. Man has always tried to borrow from their neighbor or friends either a cup of sugar or cold harsh cash from time to time. 

With emergence of civilization, the need for a legal system to control interest rates imposed on loans and credit became apparent. Some loans had a fixed maturity and fixed interest rate while others were in form of bill or note that a creditor could sell it to another buyer. An example of how the legal system was used during historical times to regulate loans and credit include Julius Caesar. After taking over Rome, Caesar changed the Roman law such as providing the bankers with permission to repossess land in lieu of loan payments. This signified a remarkable shift of power in the association between debtors and creditors ( Markus, 2010). 

During those years, contracts were printed into clay tablets, which have been discovered. These tablets reveal the footage of all characteristics of the economic and social behavior of man many thousands of years before Christ. Records of loans issued at international level from one nation to another have also been uncovered in clay tablets. Examples of the people involved in international loans include Syrians, Hittites, Elamites, Assyrians, Babylonians, and Egyptians. The existence of credit and loans can also be traced through the interest rates, commodities, and price of gold and silver back thousands of years. According to Matthew 5:42, the bible states that giving to someone who asks help from you is a blessing and the person should not be turned away if they wish to borrow from you. It is evident that without loans and credit, the world we live in would not be able to run smoothly. Most of us require credit or loans to pay for everyday items such as mortgage for purchasing homes (Armstrong, 2019). 

The existing popular belief is that credit and loan began only a few hundred years ago. It is argued that modern banking started after the Reformation that marked the beginning of Capitalism. This idea gives modern civilization more credit at the expense of archives of history of loans and credit. Although the moneylenders existed in early times, they did not accept deposits easily, which differentiate them significantly from the modern creditors who accept deposits. Nevertheless, historical records reveal that the early banking establishments are nearly similar to the working of the modern banks. The history of interest rates and credit discloses one key trend, which has been steady throughout all time (Armstrong, 2019). Therefore, it can be stated that history of early moneylenders contributed to the establishment of the banks and the widespread use of loans and credit for its functioning. 

Conclusion 

It is evident that banks have come a long way from the ancient world to the modern world. Since the existence of credit and loans several thousands of years, moneylenders offered people with loans in terms of a cup of sugar to cold harsh cash. Currently, loans and credits are offered by the banks. Banks have existed to offer the primary function of lending money to the people. Therefore, loans and credits have been in existence for several thousands of years. 

References 

Armstrong, M, A. (2019). Part I OF IV- A Brief History of World Credit & interest Rates. Armstrong Economics. Retrieved from: https://www.armstrongeconomics.com/research/a-brief-history-of-world-credit-interest-rates/3000-b-c-500-a-d-the-ancient-economy/ 

Beattie, A. (2018). The Evolution of Banking over Time. Investopedia. Accessed from: https://www.investopedia.com/articles/07/banking.asp 

Markus, T. (2010). "The Great Turning Point."  Zagreb: The Croatian Institute of History .