Loans and money go hand in hand with each other. Money lending has a very long history that started almost simultaneously to the appearance of the first trading tokens. It was initiated by a gradual accumulation of wealth by individuals who then decided to provide their surplus of money to those who would convert it into products and more money; thus their initial investment would appreciate. The first documented loans date back to Mesopotamia in approximately 2000 BC when farming used to be the main economic activity. The installments of these loans took the form of crops or animals. At that time, the first set of laws related to this matter was issued on a clay tablet.
The Maurya dynasty
In India, during the Maurya dynasty, people lent money under an instrument similar to our contemporary loan deeds. These instruments were called Adesha. Merchants who traded goods in different cities were the main users of this instrument. These loans simplified goods flow among particular locations. At that time, temples fulfilled the function of contemporary banks and supervised everything.
People’s view on loans
As lending spread all over the world, different perspectives of loans and their amounts started evolving. Christianity and Islam had a very unfavorable attitude towards loans bearing interest. They utterly rejected usury. In contrast, people of the jewish faith have embraced loans and interest for a long time. This led to the first public condemnation of Jewish culture and frequently to their pursuit. The laws from many European countries entirely banned Jews from owning land. For more information on the history of loans, click here: https://en.wikipedia.org/wiki/Loan#Types_of_loans.
History of banks
The first banks in the world started operations around 1500 AD in Italy. The Medici family was paramount in the development of these first banking institutions. Loans and money date way back. Loans of Italian banking houses were provided particularly to farmers. There was, however, a risk of crop failure when the land was too arid or flooded. In order to avoid financial shocks during environmental disasters, banks started offering also insurance of crops with their loans. This was actually the first developed loan system which is partially similar to our payment ability protection insurance. In England, during those years especially loans secured by gold developed. More about bank history here: https://en.wikipedia.org/wiki/Bank#History.
Loans in monarchies
Since 1500 AD, banking houses spread around the European continent. With their help, governments enacted laws that regulated loans. Monarchs of the particular countries frequently utilized loans, particularly in order to finance war conflicts. This subsequently caused another arrangement of Europe since military assaults were often unsuccessful and loans became non-refundable.