Pawnshop business pays big as holiday nears
Pawnshop business pays big as holiday nears
Tony Hotland, The Jakarta Post, Jakarta
Jati, 40, is waiting for her turn to redeem her pawned gold ring
at Jatinegara pawnshop, East Jakarta. She initially received Rp
125,000 (US$14.71) for the ring, but she must redeem it for Rp
148,000.
"Well, I already have the money to buy it back, so why should
I wait any longer? Besides, I don't want to forget that I pawned
my ring here," Jati told The Jakarta Post recently.
She had pawned one of her rings in July to pay for her six-
year-old son's school admission fee.
In another corner of the room, Suti, 57, had just redeemed her
seven-gram gold ring.
"I had to buy it back for Rp 374,000. I reclaimed the ring
because I wanted it back, not in some pawnshop somewhere," she
said.
Two weeks before the Idul Fitri holiday, pawnshops are usually
packed with people both pawning and redeeming belongings that
were used as collateral for loans.
However, the current trend shows that the shops are swarming
mostly with people reclaiming their pawned treasures, rather than
those seeking a loan.
Manager of Jatinegara pawnshop Tulus Widodo said these days,
the shop saw more cash from people redeeming goods than from
interest on loans.
"I think it's because people want to use their pawned cars or
wear their jewelry during Idul Fitri. Jewelry is a part of
holiday fashion," he said.
"For example, today we spent Rp 220 million in loans, but
received Rp 270 million from people redeeming their goods."
Jewelry is the most frequently pawned item, making up almost
90 percent of pawned goods.
Sofyan, manager of Kebayoran Baru pawnshop in South Jakarta,
expressed a similar view.
"Although there's no significant difference between regular
months and the holiday season in terms of the number of
transactions, there have been more people paying back their loans
than those pawning items," he said.
He also thought the trend was due to people wanting to show
off their jewelry when meeting people during holiday
celebrations.
The higher number of people redeeming their goods from the
pawnshops cannot be seen as an indication of a better economic
condition, however, since the amount of loans made by pawnshops
during normal months is astronomical.
"We usually loan between Rp 5.2 billion to Rp 5.6 billion per
month, with 100 to 200 items pawned each day. The loans are
mostly used for business or capital," Sofyan said.
Tulus said the Jatinegara pawnshop saw around Rp 4 billion go
out as loans monthly, and about 5,000 items pawned as collateral.
He also said the number of customers coming to pawn items
usually rose again several days after the festivities.