The medieval invention of emancipating credit
By Maria Giuseppna Muzzarelli
XIV International Economic History Congress (2006)
Introduction: The history of solidaristic credit, which also belongs to today’s system of microcredit, has ancient origins dating back to the 15th century. For example, the pawnshop, an institute that still functions today in many cities, originated at the end of the 15th century. The pawnshops of the Middle Ages operated in a similar way to the shops of today. Tailoring the type of credit to each client’s individual needs, the medieval pawnshops helped people obtain credit they would normally have been denied at a regular bank. Paraphrasing the title of Maria Novak’s book, the official banks made loans only to the rich. Therefore, the pawnshops were directed, according to the original statutes, to people who were neither very rich nor absolutely poor.
The system of credit that the pawnshops wanted to offer developed in the name of piety. Intending to take care of people in need, the pawnshops functioned like a bank but under particularly favourable conditions for a well-defined type of client: a moderately poor and virtuous citizen.
Similar to today’s microcredit, solidarity was the central point of pawnshops during the Middle Ages and first Modern Era. As a scholar of the Middle Ages, I will not focus on the modern microcredit system but, instead, on the medieval invention of the pawnshop. In particular, I intend to reveal the common elements between the medieval and modern systems that are rarely noted. Microcredit is a type of credit offered today to people who need support and a small sum of money to escape poverty; many elements of the microcredit system seem new, but are really oversights of the past historical models.