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Imagine analyzing a period of more than 5,500 years. A look at the relevant events over five and a half millennia. It was precisely this exercise that ANBC (National Association of Credit Bureaus) set out to do in relation to the history of credit. .

We went to the beginnings of credit, a time before the birth of Christ, as the starting point for the survey. After all, for everything there is a beginning, and the beginning of credit occurred in Sumerian society in 3,500 BC, and was later used by the Babylonians, Phoenicians and Romans.

The Sumerian civilization was located in the Mesopotamia region, which today is equivalent to the area where Iraq is located. Its economic structure depended on rivers, and agriculture, of course, was its main activity. At that time, credit was intended to promote agricultural activity. In the Middle Ages, there was a momentary setback for credit, as the practice of charging interest, called usury, was seen as immoral and the world's wealth stagnated. Fortunately, credit flourished again at the time of the Great Navigations, from 1500 to 1600, when it enabled the discovery and subsequent development of lands far from Europe. It was therefore the driving force behind the expansion of maps, which until then had been limited to just a few regions of the world.

All this evolution throughout history was only possible with the formation of a structure that made it possible for rules to be clear and applicable to everyone. With the development of international trade and the requirement for documents to pay for goods and services, countries realized the need to adopt extraterritorial measures that were valid for everyone.

In 1930, in Switzerland, attended by 31 countries, including Brazil, the Geneva Convention universally unified foreign exchange laws. This meant, among other advances, that there was now a uniform law on bills of exchange and promissory notes. Even so, it was only in 1942 that Brazil adhered to the Convention's decisions.

Still on the subject of Brazil, in the 1960s, credit played an essential role in the development of the vehicle industry in general, household appliances, furniture and other durable consumer goods. It was also decisive for the growth of textile, footwear, clothing and other semi-durable consumer goods factories. In other words, it financed our period of industrialization.

Over the years, as a way of making the relationship between creditor and debtor transparent and ensuring the healthy development of the credit market, credit bureaus have emerged. In 1955, the Serviço de Proteção ao Crédito (Credit Protection Service), now known as SPC Brasil, was created on the initiative of businessmen from Rio Grande do Sul. In the same year, the Central Credit Protection Service (SCPC), now Boa Vista SCPC, also began its activities. Thirteen years later, Serasa was created on the initiative of Febraban (Brazilian Federation of Banks). In 2007, the Irish group Experian bought control of it, which is why it was renamed Serasa Experian. More recently, last year, Quod was formed, a credit fintech controlled by the five largest banks operating in the country.

Over the years, the central function of credit in enabling societies to develop has always remained the same. The only thing is that it has started to boost more urban than rural activities, which is natural, since countries have become more urbanized, even though agriculture, especially in countries that depend on it like Brazil, continues to be one of the main demanders for loans and financing.

It is also clear that the volume of credit has grown considerably. In the United States, for example, the ratio of credit to GDP is 150%, while in Brazil it is 47.7%. In Chile, an economy similar to ours, it is close to 90%. And this volume is set to grow over the next few decades, which should be greater for developing countries like Brazil. With the recent approval of the new Positive Registry, Our expectation is that there will be an increase in lending of approximately 20% of GDP in the medium term, which will enable more consumers and companies to access loans and financing.

What does the future hold? I'll tell you soon in my next article. What I can tell you is that technologies are already being used in the granting of credit, and this is great for everyone involved in the process.

Thanks for reading! Access other content at ANBC website.

By: Elias Sfeir President of ANBC & Member of the Climate Council of the City of São Paulo & Certified Advisor