Sat, 13 Dec 1997

Hardships prompt citizens to pawn their valuables

JAKARTA (JP): The number of people hocking their belongings at state-run pawnshops in the city has skyrocketed in the lead up to the festive season, an official said yesterday.

The head of Perum Pegadaian Pawn Company's Jakarta office, Ketut Sethyon, said people began flocking to the 23 pawnshops for some extra cash when the rupiah started to weaken in June.

With the economic crisis digging in its heals and Christmas, the Ramadhan fasting month and Idul Fitri just a stone's throw away, people -- in particular businesspeople -- are finding the lure of pawnshops hard to resist.

Here they can deposit their belongings, including cars and jewelry, as security for loans, he said.

"People need extra money to run their businesses during such a 'state of emergency'. It's hard to get a loan from the bank now, so pawnshops are an option for solving financial problems, such as paying their employees."

Ketut said some pawnshops had recorded a huge increase in customers and earnings since June.

The company's Tanjung Duren office in West Jakarta, for instance, has logged about 1,500 customers -- a seven-fold increase in its average monthly trading.

The loans approved since June totaled at least Rp 600 million (US$123,710) per month, which is remarkably high, he said.

The monthly number of customers at the Cengkareng pawnshop has also doubled from its usual total of 350. However, the number jumped to 1,355 customers in July with loans totaling Rp 678 million, he said.

In July, Pegadaian's pawnshops in Senen, Central Jakarta, recorded 1,182 customers, which is almost three times higher than the regular tally of 400. The total value of loans surged to Rp 1.3 billion.

Ketut said some pawnshops have even had remarkable patronage in the first week of this month.

The Salemba pawnshop in Central Jakarta, for example, has already had 1,200 customers through its doors and managed to earn Rp 450 million during that period.

"We are optimistic about the 40-percent increase in our average monthly income of Rp 1.2 billion which is due to the growing demand for money in the lead up to Ramadhan and Idul Fitri," the pawnshop's head, Remses Gurning, said.

Ninety-five percent of Salemba customers pawn jewelry, while the remaining 5 percent pledge a variety of belongings, including electronic goods, he said.

Pegadaian's loans for pawned goods range between Rp 1 million and Rp 20 million with an interest rate of 1.75 percent per 15 days.

Three weeks before Ramadhan, the government-run pawnshops are usually packed with customers and brokers.

"But the current surge is still continuing in almost all of our 23 pawnshops in and around the city."

Ketut said that Pegadaian would end up with an estimated net income of Rp 10 billion this year from loans worth about Rp 276 billion.

"As of the first week of this month, we've achieved about Rp 262 billion. We're optimistic that we'll reach the target." (edt)