The Origins of Interest Bearing Loans in Mesopotamia

Mesopotamian city states were dominated by vast temples, gigantic complex industrial institutions. Sumerian rulers rarely went so far as to declare themselves gods, but they often came very close. They did not do it by imposing public debts, but rather by cancelling private ones. We don't know precisely when and how interest bearing loans originated, since they appear to pre date writing. Most likely, temple administrators invented the idea as a way of financing the caravan trade.