We have evidence of this practice dating back to 3500 BC while it is believed that installment loans are a fairly new concept! It really is thought that the installment loan was made in the 1st known urban civilization Sumer. Sumer was at what’s now Southern Iraq along with a robust agricultural community despite the fact that 89% of these population lived in a metropolitan environment. There is certainly proof that farmers took installment loans to buy their plants to be repaid at a future date, a training that nevertheless takes place today in our contemporary world.
In 1800 BC in Babylon, today’s central Iraq, there is some of this first documented regulations for installment loans. The King of Babylon, created laws stating, “all loans needed have a public witness to be valid” in the 18th century BC, Hammurabi. He additionally set the appropriate optimum interest to be charged at 33per cent for grains and 20% for silvers lent. Continue reading →