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Thursday, June 27, 2013

Pawnshop and Money Lenders

How things have changed. In the past, there were few pawnshop. Most of them like this one here are imposing looking with iron bars, high counter and old man peering down at the customers. 

I have walked past many of these pawnshop and thank goodness, despite our family situation when we were young, we never had to resort to them to get money. Over time, the number of pawnshops went down as young people shun them because of the stigma and turned to easy bank loans.

Then in the past few years, a new breed of pawnshops have sprouted. No longer confined to the older city neighbourhood of Chinatown, Jalan Besar and Geylang, these new breed of pawnshops are in the HDB heartlands and shopping malls.

These pawnshops have glitzy shopfront more like jewellery store and are fronted by celebrities making it sound cool to pawn things. And judging by the number of them mushrooming all over, it is very profitable too. At least for the pawnshop owner.

Along with the pawnshops there are now a new breed of money lenders. Money lenders used to be just a small little cubicle in a shopping mall in Chinatown or Geylang and do not advertise their services. But in recent years with the relaxation of the Money Lending Act, illegal money lenders hiding under the cloak of a licence are openly touting their services and getting away with obscene interest rates.

And what is the real reasons for the rise of these new fanged pawnshops and money lenders? In the past, the people who goes to such places usually do so as a last resort - to borrow money to tide over the month or to pay for some urgent unplanned for expenses.

But according to a friend who works in a pawnshop, the new breed of customers are not the old people who are not comfortable in such glitzy places but the PMEBs. And why are these people going to such places? Clue: these places started sprouting only in recent years after the opening of? Why, the 2 "integrated resorts". Yes our 2 world famous casinos are the sole factor behind the rise of these places. According to my friend who works in the pawnshop, their busiest time are Thursday and Friday where customers walked in to hock their jewellery and of there to the casino. If they win, they come back and redeem their stuff and if not, it is a drive to the money lenders to borrow some money to tide over until their next winning!

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