1. The Ancient Era: Need-Based Credit (3rd Century BCE)
Long before the invention of paper money or even standardized coinage the concept of debt had already altered human relationships in Ancient Mesopotamia and Babylonia.
Commodity-Based Loans: In early agrarian societies, borrowing did not revolve around cash. Instead, it involved vital survival commodities. Farmers borrowed agricultural assets such as crop seeds, breeding livestock, or raw precious metals to get through tough seasons.
The Legal Framework: This credit system was so integral to society that it was formally codified in the famous Code of Hammurabi in Babylon. These early laws regulated how loans were issued, establishing interest rates and collateral requirements to fund international trade or prevent starvations. During this era, a formal institution dedicated to “saving” or depositing wealth for the average citizen simply did not exist.
