Although pawnbroking is fast becoming a mainstream financial tool and the subject of many a reality television series, most people are surprised to learn that pawnbrokers and pawnbroking have deep cultural roots. The history of pawnbroking is as diverse as that of any industry.
Pawnbroking dates back thousands of years. The practice of pawning valuable items for cash existed in China 3000 years ago. Pawnbroking also existed in Ancient Greece and the Roman Empire. As the empire expanded, the pawn business model was introduced to new parts of the ancient world.
Medieval pawn shop banking was popular among the Lombardi of Northern Italy. Pawn shops of that era were known as the “Lombard”. The three gold balls hung outside of Lombard merchants’ shops were later assimilated as the pawnbroker symbol, which is still in use today.
History demonstrates that pawnbroking provided a much needed financial service to all members of society, not just the poor. Heads of state and monarchs have a long record of using pawn loans to fund wars, expansions and exploration missions. During the Norman Conquest in here 1066, Edward III is reported to have pawned his jewels to raise funds for his war with France. King Henry V may have also pawned some of his royal possessions to fund military exploits. According to tradition, the Spanish Queen Isabella I pawned her jewelry to fund Christopher Columbus’s voyage to the New World.
Additionally, the pawn business model was used by the Crusaders, who used property and holdings to finance expeditions in the Holy Land. In lieu of repayment, monasteries and other diocese would use these lands to grow crops for a specified number of seasons.
In 1450 the Franciscan Monk, Barnaba Manassei, founded a no-interest loan pawn shop designed to give financial assistance to the poor. The Monte di Pietà, located in Perugia, Italy, supported itself through donations, and a movement of no-interest or low-interest pawn shops spread to Spain and Mexico. Today, the Nacional Monte de Piedad is a national charity with over 150 branches in Mexico City.
Today, pawn shops can be found world wide. Pawn loans are an essential financial tool for customers in Asia, South America and here in the United States. To this day, consumers continue to use collateral loans to meet their financial needs, just as consumers did thousands of years ago.