The breach of credit contracts in the eighteenth-century: the case of the Misericórdia of Lisbon

Institutional investors in the Portuguese credit market (1550–1800): The case of the Misericórdias

“…Debtors often had difficulty in paying the annual interest, and the Misericórdia failed to set up an effective charging system, enabling the accumulation of an extraordinary volume of due interest and capital, with severe repercussions for the organisation's financial health. Even resorting to law courts or private order institutions did not solve loan non-compliance issues (Rodrigues 2019a(Rodrigues , 2019c. In this context, the crown started to meddle in the confraternity's credit activity (Lopes 2008).…”

“…Absolute number of transactions in public credit (130) and in private credit (106). Sources: For government bonds, ANTT, Chancelarias régias and Rodrigues (2019b); for private loans, Rodrigues (2019a). Deflator as in Table 1.…”

“…22 Missed annual interest payments, default on credit and debtors' bankruptcies were common scenarios in the Misericórdias' lending activities (Lopes 2008). For some Misericórdias, such as that of Lisbon, the non-compliance of private credit contracts took significant proportions, hovering around 70 per cent of all loans (Rodrigues 2019a(Rodrigues , 2019c. The high proportion of default on debts in the case of Lisbon had to do with the inbreeding nature of the loans, which were addressed mainly to the members of the high nobility, who were, at the same time, members of the confraternity and had a seat on its governing bodies.…”

“…The series includes loan amounts that were reconstructed from other sources, mainly lawsuits, private correspondence and deliberations of the ruling boards. Absolute number of transactions in public credit (130) and in private credit (106). Sources : For government bonds, ANTT, Chancelarias régias and Rodrigues (2019b); for private loans, Rodrigues (2019a). Deflator as in Table 1.…”

“…As for credit markets, the role of these charities was far from insignificant. In the first half of the 18 th century, loans granted by the Misericórdia of Lisbon accounted for 24 per cent of the total volume of loans signed in one of Lisbon's notary bureaux (Rodrigues 2019a). The relevance of the Misericórdias as public credit suppliers is also mirrored in the 1681 royal budget, for 16 per cent of the juros (interest) were paid to the Misericórdias (8.5 per cent to the Misericórdia of Lisbon, and 2.5 per cent to that of Porto).…”