Pawnshops doing brisk business before holiday

JAKARTA (JP): The total amount of loans to be distributed ahead of Idul Fitri by the state-run pawnshops in the capital will amount to some Rp 30 billion, or some 50 percent higher than last year's corresponding sum of Rp 20 billion, an executive said.

The amount excludes the total repayment which is expected to reach some Rp 40 billion during this annual peak season, Dedi Kusdedi, director of operations of the state-owned Perum Pegadaian pawnshop company, said on Wednesday.

The estimate, he said, was based on the current reality where many Jakartans have joined the long queues at the city's 30 pawnshops to mortgage their belongings for fresh money to cover the Idul Fitri festive season.

With the prolonged economic crisis still raging and the Idul Fitri holidays just two weeks away, Jakartans, he said, were finding the lure of pawnshops hard to resist.

"We're experiencing a weird phenomenon today. Due to the crisis, many people who cannot afford to pay for goodies they want to take to their hometowns are pawning their precious belongings here," Dedi said.

"On the other hand, the middle- to upper-class Jakartans are repaying their loans in exchange for the goods they pawned as they want to wear expensive jewelry and drive expensive cars during the festive season," he added.

The busy period for the pawnshops during Idul Fitri usually starts from the early days of the Ramadhan fasting month and lasts one or two weeks after Idul Fitri, which is to mark the end of Ramadhan.

During the first week of this month alone, the pawnshop company had already handed over loans worth Rp 16 billion and received Rp 18 billion in reimbursement at its pawnshops in Jakarta, Dedi said.

No problems

The pawnshops in Jakarta so far have had "no problems" with lending out money thanks to the steady inflow of cash. In the meantime, he said, the Jakarta chapter still has a total of Rp 8 billion in cash ready to serve customers wanting to celebrate the annual Muslim festive season.

"However, we are not too sure about the our cash inflow after the Idul Fitri holidays. We still have no idea how we are going to handle situations then," Dedi said.

According to Chaerul Anam, an executive at the Kebayoran Baru pawnshop in South Jakarta, loans approved at his branch since Jan. 2 alone totaled at least Rp 750 million.

"This is nearly twice the figure for the first week of last month. People are pawning their goods like crazy here," Chaerul said.

"I guess people dread the high interest rates on bank loans and they know that they have to go through long and dreary procedures to get the loans."

The Jatinegara pawnshop in East Jakarta reported that people have flocked into the office since weeks before Ramadhan to repay their loans in exchange for goods pawned.

"They have repaid loans worth Rp 289.3 million within the first week of this month. Naturally, they want their jewelry back to show off to family friends," Dede Kurniawan of the pawnshop said laughingly.

According to him, loans distributed at the branch office since Jan. 2 had already reached Rp 292.2 million.

"People also need money to run businesses even in this time of hardship. Bank procedures and interest rates are becoming too much for the people now," Dede explained.

On a national scale, Dedi Kusdedi estimated that the pawnshop company this year would end up with a net income of Rp 20 billion from loans that totaled some Rp 300 billion.

"We made Rp 17 billion in net income last year from loans worth Rp 240 billion," he said. (ylt)