Borrowings can be official and unofficial where we obtain official borrowings known as loans from reputed financial institutions and unofficial borrowings from cash lender and other close pals and colleges. Cash is burrowed on different occasions for different needs ranging from a few dollars to a few thousands of dollars.
In the ancient times the borrowings were developed in the times of barter system where the farmers would exchange excess crops as a loan until one farmer would share his/her share of meat of crop. After the barter system the trade was evolved and many nations were connected through the trade system. During this time the traders, used to bring excess goods as the transportation process was much difficult and travelling for small quantities of goods were considered a waste of time and cash. Therefore, the traders would drop off the goods at once and collect the value for the goods in the next visit.
From these ancient times and after the development of established financial institutions and banks, there were established long processes in order to process a borrowing. These long processes were created because loaning cash put the lender at a risk of not being able to recollect his/her cash and the whereabouts of the borrower was difficult to be found after they disappeared taking huge sums of cash with them.
Therefore quick and easy cash loans were made into complicated processes so that the security details of the borrower were kept with the lenders and hassle-free fast cash loan. After a while the concept of interest was developed as the lenders realized that loaning cash loses them the opportunity of using that cash that they can use for any other business and decided that the borrowers should pay a little extra than the original amount that they borrowed so that the lender could recover the amounts that they could have easily invested somewhere else.
After sometime, the financial institutions were taken under the governments and other ruling bodies of the country to ensure that the financial activities of the country are supervised and the banks and other institutes could not deal with black money and make the whole economy collapse. The government supervised all financial institutes and they started realizing that the cash lending process if very complicated and needs much more careful attention than an ordinary financial transaction.
But, current in the digital era, everyone is looking for quicker and faster solutions mostly digital based and therefore have very little patience to long paper based work and time consuming activities. Therefore the borrowing process has been simplified to provide online loans with much lesser need for documentation and supervision.
These loans have made the work process much easier for the bank/ financial institute and the customers. The borrowings took a considerably long time to be on the digital platform due to the high risks it possesses but however today, it is successfully used for many individual and business transactions.