The process of lending a certain monetary amount to the debtor has already been present even during the ancient times and today it is now called loan. In result to the never-ending wants and demands of the majority, there have been different types of loan that evolved in today’s current time; and before anything else, we have to know the traditional lending scheme that our ancestors applied previously in a chronological sense. Since, they say that,
“Ignorance will never be a reason for not being able to knowing anything”.
The formal lending we have known today originated from the Ancient Rome. During those times the pawnbrokers or the private individual who initiates and transacts banking to other people, they practice a similar process of lending money that we have today— the payday loans. Mostly, their targets are the farmers, because they only have a big amount of money during the harvesting season; they have loads of rice crops so they will exchange it with money in return. Further, they’ll use secure lending that uses different negotiable items as the collateral to stabilize the risk.
Dark or Middle Ages
This has been one of the crucial days of the loan’s age because Christians have been forbidden to lend money with interest; while the Jews were only allowed to do loan business with interest to non-Jews. This was the period that the word bank or bancas has immersed. Any retired lender would traditionally smash his bench thus creating the word bankrupt for a banking term.
This was the year that paves way for a new lending scheme to give an opportunity to the low income Americans that is meant to be increasingly equitable and accessibility. On the year 1816 month of December, Philadelphia Savings Fund Society was the first company to open their doors in saving and loan union to give every social class of American to have a place to keep their money.
Halfway of 20th Century
On this point, there has been a major shift in terms of how Singapore licensed money lenders will be able to identify reasonable and reliable borrowers. Further, they focused on the financial data as their mainstream model and this came to an idea to open the two digital lending:
- Online Lending
- Alternative Digital Online Lending