There are common misconceptions, prejudices, and questions about the pawn broking trade.For five thousand years pawnbrokers have lent credit to the wealthy, the impoverished, the enterprising and opportunistic. Considered by many to be the world’s second oldest profession, the pawn broking industry has survived where many other enterprises have died away or morphed into a shadow of their former glory. Pawn broking remains as it has always been: enterprising, omnipresent, and misunderstood.
Donald Trump calls it ‘leveraging assets’, Loan Merchant Bank just calls it a ‘pawn agreement’. Pawn has become a mainstream financial service, people need access to credit, they have to get through to the end of the month and they know that a pawnbroker will never ruin your credit and will never go into debt collection.
Clients are entrepreneurs and small business owners who may have cyclical cash flow and may also find traditional banks standoffish. Yet when times are flush, they celebrate by buying pricey cars and valuables. So when times are tough it could make sense to pawn that diamond ring for a quick R100 000 to make month end payroll.
As banks zero in on more affluent customers who promise twice the revenue of their lower-income counterparts and remain stingy with credit in lower income areas, pawnshops are revamping their image and stepping into the void to offer financial services.