Monte di pietà

A mount of piety is an institutional pawnbroker run as a charity in Europe from Renaissance times till today, more often referred to by the relevant local term, such as monte di pietà (Italian), mont de piété (French) or monte de piedad (Spanish). Similar institutions were established in the colonies of Catholic countries; the Mexican Nacional Monte de Piedad is still in operation.

This fifteenth-century institution originated in Italy and was developed in cities as a reform against money lending, an early form of organized charity.

The public office was organized and operated by the Catholic Churches and offered financial loans at a moderate interest to those in need. The organizing principle, based on the benefit of the borrower and not the profit of the lender, was viewed as a benevolent alternative to the loans provided by moneylenders. The organization of the Monte di Pietà depended on acquiring a monte, a collection of funds from voluntary donations by financially privileged people who had no intentions of regaining their money. The people in need would then be able to come to the Monte di Pietà and give an item of value in exchange for a monetary loan. The term of the loan would last the course of a year and would only be worth about two-thirds of the borrower’s item value. A pre-determined interest rate would be applied to the loan and these profits were used to pay the expenses of operating the Monte di Pietà.

Over succeeding centuries such organizations spread throughout the continent of Western Europe, a credit to the preaching of Franciscans and their condemnation of usury, with later support by both Dominican preachers and humanist intellectuals of the fifteenth century.

In 1462, the first recorded Monte di Pietà was founded in Perugia. Between 1462 and 1470, an estimated forty more were developed. The Franciscan Marco di Matteo Strozzi preached about the benefits of a Monte di Pietà in combating usury. He left a set of memoirs that outlined his goal to rid the city of Jewish money lenders and to replace them with Christian pawn shops which allowed the poor to acquire cheap credit.

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Wikipedia