Monte di Pieta

About Monte di Pieta

The Monte di Pieta, or mount of piety, was invented by Franciscan monks in Perugia in 1462 as a charitable lending institution. Monti di Pieta provided low interest loans to the poor against pawned items, as an alternative to usurious moneylenders. The institution spread across Italy and Catholic Europe. Some Monti evolved into full banks, including the Banca Monte dei Paschi di Siena. The concept was endorsed by Pope Leo X in 1515. The Monti di Pieta were the first institutional response to poverty and financial exclusion. The pawnshop model continues today through charitable pawnshops in many countries. The microfinance movement founded by Muhammad Yunus at Grameen Bank echoes the Monti di Pieta principles.