A woman in a T-shirt and sandals wanders into a pawnshop in the busy shopping district of Pasay city in the Manila metropolitan area.
She pulls a blue piece of paper from her pocket and hands it to the store clerk along with 3,000 pesos (about 7,080 yen).
A few minutes later, the clerk returns and hands her back her gold necklace. The pawnshop had been keeping it as collateral for a loan.
“I had to hand over the necklace because I did not have enough money to pay my house rent. I couldn’t wait until the day when my husband, who works in South Korea, got money to me,” she said.
The necklace comes and goes between her and the pawnshop several times a year. The woman has no qualms about the exchange.
“I bought it to use as collateral. I pawn my own stuff, so I don’t feel guilty.”
In less than five minutes, another customer shows up. She hands over a necklace and receives 1,800 pesos (about 4,250 yen).
“My daughter is sick. But I bought a personal computer. (So now I need some extra cash),” she said.
The store is an outlet of Ablaza, a pawnshop chain operating in the Manila metropolitan area. The store is one of the busiest pawnshops in the area.
Many of the customers borrow about 1,000 pesos each, said 38-year-old clerk Marilou Fajardo, who has worked at the store for 18 years.
She says she gets an insight into the lives of her customers when they pawn their articles.
One man comes to her throughout the year to pawn his wedding ring. Each time, he comes back several days later to return the money and take back the ring.
A female customer comes to pawn an item and begins weeping as she starts talking about her personal life.
Fajardo smiles as she says that when she appraises the value of her customers’ goods, she does not think about the memories attached to the items or hardships of their lives.
But she also says, “When I think that I’m useful to the customer, I feel that this job is worth doing.”
The pawnshop business is said to be the oldest financial service in humankind’s history. In recent years, it has been growing rapidly in the Philippines.
According to the Bangko Sentral ng Pilipinas (BSP), the central bank of the Philippines, as of December 2006, there were about 13,000 registered pawnshops across the nation–three times more than in 1995.
The money lent by the pawnshops also grew to 10 billion pesos (23.6 billion yen) in 2004 from 5.5 billion pesos (13 billion yen) in 1995.
One of the reasons the business has grown so much is because of the convenience and immediacy in which customers can receive loans.
The average turnaround from the appraisal of items to lending money is only about 20 minutes. It is much shorter than those required by banks, which implement complicated examinations and procedures.
The interest rates stand at around 5 percent compounding every 30 days, much lower than those of loan sharks.
Despite the common perception, the borrowers are not necessarily poor. Rather, many of the customers are middle-class people who have family members working abroad.
In the Philippines, more than 10 percent of its gross national product (GNP) comes from people working abroad. Many family members depend on this money to survive.
Also Filipinos have little interest in saving money.
A survey shows that families with members working overseas save only 1 percent of the money they get from overseas. When they spend all their cash, they are forced to pawn items such as pieces of jewelry, to get funds to survive. They use the cash until the next lot of money arrives from overseas.
Marc Ablaza, 40, an executive of Ablaza, said that about 60 percent of its customers come back in order to return money and take back their belongings. It was about 30 percent 10 years ago.
“The sharp rise implies that people who will probably be able to return the money are increasingly using pawnshops,” he said.
Meanwhile, at a gem appraisal school in Manila, about 80 percent of the students are pawnshop employees, including those who want to open pawnshops themselves.
While listening to their lecturer, they stare at the 0.5 carat diamonds they hold with their thin tweezers.
“Recently, demand for gemologists who can appraise the value of diamonds has been strong,” said the school principal, Lucille Bocobo.
She said most pawnshops have their own in-house training systems to teach their employees how to appraise gems. Recently, however, more expensive gems have been increasingly brought to pawnshops making a higher level of appraisal skills more necessary. That’s why they are sending their employees to the school.
According to Ablaza, the image of pawnshops used to be dark. Many of their customers were those who had gone broke. Some of the items brought to the shops were stolen ones.
In the 1990s, a growing number of families with members working abroad began using pawnshops. The stores began revamping their interior designs and processes to make it easier for customers to borrow money.
The Ablaza chain painted all of its outlets in light blue and opened shops with female-only clerks so that women could borrow money without anxiety.
The largest pawnshop chain operator, Cebuana Lhuillier, began to air TV commercials in 1994. Since last year, the company has used a catchphrase which emphasizes its higher appraisal rates compared to other pawnshops.
Competition among pawnshops is increasingly becoming fiercer. And the Philippines is not the only country where the popularity of pawnshops is growing. In other countries, such as Indonesia and Sri Lanka, banks are also opening pawnshops.
According to Nimal A. Fernando, a researcher at the Asian Development Bank (ADB), only state-run companies can operate pawnshops in Indonesia. There are now 722 pawnshops throughout the country. About 15 million people used the shops in 2001.
“The number of customers shows that the pawnshops are now a part of the people’s lives,” said Fernando.
About 40 percent of them borrow less than the equivalent of $4.5 (about 520 yen) each time.
A local bank in Sri Lanka extended 40 percent of its loans by accepting pawned items in 1999.
Pawnshops still have a negative image with some considering their management style dubious or feeling they are exploiting poor people.
But Fernando said: “If you check the actual situation surrounding pawnshops, you will see that pawnshops are a financial service that is necessary for many people.
“You should put away your prejudice against pawnshops and reconsider their roles,” he said.
from
http://www.asahi.com/english/Herald-asahi/TKY200705100053.html
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