section_path: Culture/Economy and trade/Money and credit
section_name: Money and credit
paragraph_text: Money and credit
  
  Large institutions kept their accounts in barley and silver, often with a fixed rate between them. The obligations, loans and prices in general were usually denominated in one of them. Many transactions involved debt, for example goods consigned to merchants by temple and beer advanced by "ale women".
  
  Commercial credit and agricultural consumer loans were the main types of loans. The trade credit was usually extended by temples in order to finance trade expeditions and was nominated in silver. The interest rate was set at 1/60 a month (one shekel per mina) some time before 2000 BC and it remained at that level for about two thousand years. Rural loans commonly arose as a result of unpaid obligations due to an institution (such as a temple), in this case the arrears were considered to be lent to the debtor. They were denominated in barley or other crops and the interest rate was typically much higher than for commercial loans and could amount to 1/3 to 1/2 of the loan principal.
  
  Periodically, rulers signed "clean slate" decrees that cancelled all the rural (but not commercial) debt and allowed bondservants to return to their homes. Customarily, rulers did it at the beginning of the first full year of their reign, but they could also be proclaimed at times of military conflict or crop failure. The first known ones were made by Enmetena and Urukagina of Lagash in 2400–2350 BC. According to Hudson, the purpose of these decrees was to prevent debts mounting to a degree that they threatened the fighting force, which could happen if peasants lost their subsistence land or became bondservants due to inability to repay their debt.