A short history of lending – from ancient Greece to eCoinomic.net

It is often said that who deals with money, has the money. I would not take a risk to call this folk belief fully proven but I can undoubtedly say that investing in the banking sphere is rarely a miss. Especially in a new economic reality. But let’s start from the beginning.

(painting by Quentin Matsys - "The Money Lender and His Wife".)

Already couple centuries before Christ was born, people knew that dealing with money can be profitable. Especially in a very basic usage – lending. In ancient Greece and Rome pawnbroker institution used to be very common. So, more than 2000 years ago, a collateral loan was already well known. But its blooming time started just couple centuries later, during the Middle Ages.

According to the Christian rules that time, lending money with interests was forbidden. But Venice merchants found a way to bypass this law by involving to this process a Jewish community, from whom they could borrow needed amounts.

The benches from where money lenders did their business, gave a name to the word ‘bank.’ (banca). When a lender would close his business, he would smash his bench – ‘banca rupta,’ hence ‘bankrupt’.
Let’s jump over a couple centuries to the Napoleon times. One entrepreneurial father has sent his sons to five different European cities for creating a network for money transferring. This is how international banking has been invented. If I would tell you that this family within a century became one of the wealthiest families in the world, would you guess the father’s name? It was Mayer Amschel Rothschild.

The same time, in a New World, the new era of lending just begun. The Philadelphia Savings Fund Society appeared, so the average Americans could get access to loans and possibilities of saving.

About 30 years later in 1932, the Federal Home Loan Bank system has been invented. The system supported residential mortgage lending by local financial institutions, starting a new era of mortgage financing.

Another big change in lending and in the financial system, in general, brought after-war technical progress.
Already in 1958 Bank of America launched the BankAmericard, later to become Visa, in Fresno, California where 45% of the residents were its customers. A card was sent to 60,000 residents and so the bank was able to convince merchants to accept it.

A year later lenders first started using FICO scores to make informed credit decisions.

In 1999 First Internet Bank offering online-only banking, home mortgage loans and banking services appear.
Another great change brought further internet development, making possible peer2peer lending. First company offering peer-to-peer loans was Zopa. Since that day Zopa has lent over £1.45 billion to UK consumers.

In 2009 first cryptocurrency, Bitcoin was released. From that time a great change of the economic system begun. The blockchain technology, thanks to its transparency, appeared to be suited just for the banking needs.

In 2017 Aleksei Smolianov and Maksim Akulshin invented the collateral lending system built on the blockchain – eCoinomic.net. This peer2peer global platform which allows to lends fiat money to individuals and small businesses using crypto assets as a collateral. In 2018 the project conducts the ICO.