KORANLIPOS – Bank credit is one of the financial services that plays an essential role in modern society. Through bank credit, people can purchase homes, vehicles, finance their education, or obtain capital to expand their businesses. For entrepreneurs, credit serves as a crucial source of funding that supports business growth, creates employment opportunities, and contributes to economic development. However, behind its significant role today, bank credit has a long history that dates back thousands of years, long before the establishment of modern banking institutions.
The concept of credit was born out of humanity’s need to help one another meet economic needs. Not everyone possessed enough wealth or capital to start a business or fulfill daily necessities. On the other hand, some individuals had excess wealth that remained unused. This imbalance gave rise to the practice of lending and borrowing, which gradually evolved into the modern credit system.
Historical records show that lending and borrowing practices existed as early as 3,000 BC in Mesopotamia, a region that is now part of present-day Iraq. At that time, money as we know it today did not yet exist. Transactions were conducted using agricultural products, livestock, and precious metals. Farmers often borrowed seeds or grain from granary owners to cultivate their fields. After the harvest season, they repaid the borrowed goods along with an additional amount of produce as compensation to the lender.
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This practice became the foundation of what is now known as interest in the financial world. The additional payment was considered compensation for the lender’s risk and the time during which the resources were unavailable. Although simple by today’s standards, this system demonstrated that ancient societies already understood the importance of trust in economic relationships.
