Medan folk begin to flood pawnshops

Medan folk begin to flood pawnshops

Apriadi Gunawan, The Jakarta Post/Medan

Dirman, a father of four, rode his bicycle to the main branch of
the state pawnshop on Jl. Pegadaian in Medan, the capital of
North Sumatra. Even though the weather was unbearably hot, and
Dirman was fasting, he looked determined to take care of his
business.

He parked his bicycle next to the pawnshop and began his
venture. He handed 3.5 grams of his wife's jewelry to an employee
in the pawnshop and in return he received Rp 500,000 (US$53).

"Not bad. With this money I will be able to buy cookies and
clothes for my children," said Dirman, 54, a resident of
Selayang, Medan.

Dirman had to pawn his wife's jewelry to pay for the coming
Idul Fitri holiday. He is a construction worker but has not had a
job for about a month, so money is running low.

Dirman is among the thousands of Medan residents trying to
raise money at a pawnshop ahead of Idul Fitri.

The most commonly pawned item is gold jewelry, and the average
amount of money obtained is between Rp 500,000 and Rp 1,500,000.
The interest rate of no more than 5 percent of the amount
borrowed will be a burden, but most people prefer not to think
about it.

Some people pawn their motorcycles for more than Rp 2 million,
with an interest rate of above 5 percent.

Sumardi, a resident of Marelam, had two motorcycles at home
and pawned one of them for Rp 2.5 million.

"We needed the money to go home to Bekasi for Idul Fitri this
year," said Sumardi, who planned to leave a week prior to the
holiday with his wife and two children.

A spokesman for the state-owned Pawn Company in the North
Sumatra/Aceh region, Bastian Sinaga, said on Friday there had
been an increase in the number of people visiting pawnshops over
the past week.

He said the majority of the people were coming to pawn their
belongings, but some had come to redeem their possessions.

Bastian said the pawnshops were a necessary source of money
for residents.

"We will disburse as much money is needed by residents," he
said.

There are 49 branches of the state-owned pawnshop in North
Sumatra and Aceh.

Generally, business at the pawnshops is estimated to rise by
between 10 percent and 15 percent ahead of the Idul Fitri and
Christmas holidays every year, Bastian said.

Bastian said about 90 percent of customers pawned jewelry,
while 10 percent pawned motorcycles, cars and electronic goods.

He said the turnover in North Sumatra as of September was
68.07 percent of the targeted amount of Rp 453.7 billion. He
added that he was optimistic the target would be reached in
December.