In earlier phases lending and borrowing depended on personal approach which meant possibility of bias gesture was part of it. In ancient Greece and Rome around 3000 years ago, the lending system originated and pawnbrokers lent by collecting collaterals from the borrowers, to reduce the risk of the lenders. This system was followed by an exchange of goods at an initial stage.
The modern lending system has evolved with technology with involvement of banks and lending institutions from the 1950s. The government also took interest in developing it and thought to regulate it with some law and governing body. In India we have RBI (Reserve Bank of India), to regulate banks and financial institutions.
The Digital era of banking started in 21st
century and has changed its entire course with the introduction of online banking and mobile banking. Lots of financial software has emerged to reduce manual work resulting into time and energy is saved which leads the process to become easier and faster.
Now, the rise of fintech has made more changes in the lending system and also given rise to many peer to peers sites. Recently, Amazon
has also entered into the field of lending by providing loans to the vendors and educational loans to its prime student customers.