We are not accepting new lender registrations or new commitments from existing lenders at this time. Click here for further information.

Peer to Peer Lending in Ancient Times

Even though many consider peer to peer lending to be a new concept, it's roots date back well into the most ancient of all civilizations. It may not have been called p2p lending in those times, but the concept is identical. From the first time that someone needed some extra cash to tide them over until a harvest came in, peer to peer lending was born, and has remained a vital part of every civilization since that time.

Although it is likely that peer to peer lending existed in some form since the dawn of organized civilizations, the first link can be found by researching the annals of Mesopotamian history. Tablets dating back to 1900 BC show that peer lending was in full swing and was doing quite well at the time. So well in fact, that special laws were enacted to protect consumers. Interest rate caps were instituted for the first time, keeping the rates below 33.3% for most loans.

It is interesting to compare this to today's push for rate caps on payday lending, and the legislative push to lock interest rates below 37%. Not much has changed since then, but peer to peer lending has grown considerably since this time. We can continue our journey through time by visiting Babylon in 1750 BC, and the writings of a ruler named Hammurabi. In his tablets, often referred to as Hammurabi's Code, he addressed how loans should be repaid and instituted protections for lenders as well.

During this period in history, most people earned their livings either in agricultural pursuits or in the merchant trade. For many, this meant having to go months without actually making any money. Farmers were especially vulnerable to running low on funds as they waited for their harvests to come in. As cities formed, and new structures were built, peer to peer lending continued to evolve.

In ancient Greece, it has been noted that interest rates went through a very interesting change. Between the period of 600 to 100 BC, rates continually fell until they ended up at a medium between 6 and 12%. This was one of the first recorded instances of rates falling and has been attributed to the greater market security of the time.

Each culture has had its own interpretation and rules for peer to peer lending. However, the concept of peer to peer lending has remained the same to this day. Instead of having to go to a bank, it is much easier to go to a friend or private lender, and usually it is more economical.

The advent of the Internet saw a big change in the availability of peer to peer lending, and new opportunities opened up both for lenders and those seeking financial assistance. This is now a global network of funding, linking people from all over the world, regardless of their culture or background. Peer to peer lending has a long history and chances are, it will keep going as long as there is a need for loans.