Loans Are 4,000 Years Old

Lending is not an invention of modern banks. In ancient Mesopotamia, more than 4,000 years ago, people were already borrowing grain or silver and repaying it with interest. Debt contracts were written on clay tablets in cuneiform.

Around 1750 BC, King Hammurabi of Babylon included provisions regulating lending in his famous code of laws, including maximum interest rates. Interest on a silver loan could not exceed 20%, and on a grain loan, 33⅓%. The law also required that contracts be concluded in the presence of witnesses.

In other words, the protection of lenders’ and borrowers’ rights, the regulation of interest, and the documentation of agreements, which form the foundation of a loan officer’s work today, have a history spanning millennia.