Midhat Pasha, governor of Niš; a city in the former Yugoslavia which was Ottoman territory at the time, instituted successful projects in various areas while also closely observing the hardships experienced by farmers. He concluded from his research that organization in this area was imperative because farmers needed to be saved from the clutches of usurers through state aid, but it was important that this aid be strengthened by a popular movement. Thus, in 1863; using a fund collected by farmers, and with the leadership of Midhat Pasha; an organization called "Homeland Funds" came into being which was founded by and under the auspices of the state, going down in history as the first example of national banking.
On August 15, 1888 the modern financial institution Ziraat Bank was officially established to undertake the operations of the Benefit Funds. As of that date the Benefit Funds started to function as branches of Ziraat Bank. The benefit shares that had formed the financial resource of the Benefit Funds were transferred to the bank, and subsequent shares counted toward the bank's capital.