Parmesan Cheese, Ham, Wine and Soul as Collateral
Credito Emiliono or Credem, a bank in northern Italy is providing a cash-for-cheese loan scheme. It provides cheap loan for local Parmesan makers . With interest rate of 3 % and a fee to looking the Parmesan Cheese at it's secure vault.
Since it takes about 2 years then only the cheese makers could sell their cheese, one of the way to support their Parmesan business is by taking cheap loan from Credem.
If they default the bank loan payment, then Credem will sell the cheese. Credem has been providing cash for cheese loan for the local Parmesan makers for more than 50 years.
The cheese at Credem's secure vault is so valuable that it has been robbed three times by cheese robbers.
Imagine having $ 200 million cheese as collateral.
Since, Italian's banks have been successful with Parmesan Cheese as collateral. Italian Banks may take ham and wine as collateral very soon.
The idea to use was mooted by influential Italian Bank Chairman and wine producer Mr Gianni Zonin.
"We've done it with cheese, why not with prosciutto and good wines like Brunello di Montalcino and chianti classico?" by Gianni Zonin, Chairman of the Banca Popolare .
Even the Italian Agriculture minister Mr Luca Zaia has blessed the idea. Mr Luca Zaia will discuss further with Italian treasury Minister.
Legs of cured ham and bottles of Brunello di Montalcino could be easily be sold for hundreds of euros.
For starting point, Italian Banks with start taking wines as collateral first, then only they will start considering other range of products as collateral.
These measures will help strugling producers to have access to bank credit in this difficult times.
200 people has pledge their soul as collateral in Latvia after taking loans from Kontora loan company.
Borrowers have to agree to the term stating their soul as the collateral, "“that is, my immortal soul.” Kontora loan company don't use any debtor collector or harm the debtor to collect the loan, but if the debtor defaults the loan then he will become souless.
Basically they are trusting the debtor to pay back the loan. However, the debtor has to pay hefty interest rate.
The idea of soul collateral has really angered the local clergy in Catholic, Lutheran and Orthodox sects, who criticized Kontora Loan Company.
The clergy wrote: “"We do not know what are the lenders' motives for requiring such kind of collateral. Maybe they are absolutely cynical financiers, who to use people's fear of losing their souls as the best way to secure their profits. Maybe there are religious motives behind this - satanism, occultism or something like that - intended to ruin people's souls, making use of their desperate condition,"
The prohibition of taking usury is very clearly stated in the Bible as stated below.
36 'Take no usury or interest from him; but fear your God, that your brother may live with you.
37 'You shall not lend him your money for usury, nor lend him your food at a profit. (Leviticus 25:36-37)
19 " You shall not charge interest to your brother -- interest on money or food or anything that is lent out at interest.
10 Woe is me, my mother, That you have borne me, A man of strife and a man of contention to the whole earth! I have neither lent for interest, Nor have men lent to me for interest. Every one of them curses me. (Jeremiah 15:10)
7 If he has not oppressed anyone, But has restored to the debtor his pledge; Has robbed no one by violence, But has given his bread to the hungry And covered the naked with clothing;
8 If he has not exacted usury Nor taken any increase, But has withdrawn his hand from iniquity And executed true judgment between man and man;
9 If he has walked in My statutes And kept My judgments faithfully -- He is just; He shall surely live!" Says the Lord GOD. (Ezekiel 18:7-9)
13 If he has exacted usury Or taken increase -- Shall he then live? He shall not live! If he has done any of these abominations, He shall surely die; His blood shall be upon him. (Ezekiel 18:13)
Therefore, hopefully there will be will new way of banking that will help debtors and the poor to solve their financial problem in this difficult time.
Hopefully none of us will have to pledge our souls as a collateral in the future.