In the eleventh century AD, merchant banking emerged out of the need to finance the delivery of goods over long distances. These distances took weeks or months to traverse. The associated risks were a great burden for producers. Furthermore, currency was coinage, which was heavy. To manage these problems, transportation companies emerged to manage shipping and finance companies emerged to manage payments.
The finance companies issued lightweight paper notes that were easily transported and could be exchanged for coinage or precious metals by any local participant in the financial network. This was the genesis of merchant banking.
In the latter part of the nineteenth century into the early twentieth century, wealthy individuals began to function as modern merchant bankers. The merchant banking need at that time was different; transportation and payment delivery systems had been developed. These merchant bankers helped young entrepreneurs cultivate their ideas and organizations to implement the ideas. In addition to financial assistance, the new merchant bankers offered counseling and mentoring—that is, discipleship.
Combining wise biblical counsel with capital is a Christian paradigm for merchant banking. In this paradigm success is not primarily measured by financial profit. Success is alignment with the will and ways of God. Profit is the by-product of alignment.
A Christian merchant banker recognizes that God is the sovereign Creator of the universe. This means that he has a will for every person and organization and ways that he wants his will executed.
“But seek first his kingdom and his righteousness, and all these things will be given to you as well” (Matthew 6:33) tells us that God funds his will when it is accomplished according to his ways. Every individual and organization has a divinely defined purpose in the context of his metanarrative—the Christ-centric story of history between the first creation and the new creation. Success is the by-product of building based on the Christian worldview that aligns individual and organizational purpose in the metanarrative. Consider the following diagram: