Pawnshops gain clients over banks

MAUMERE, East Nusa Tenggara: The Sikka pawnshop disbursed Rp 10 billion (US$1.12 million) in consumption loans over the past year, up from Rp 6 billion in 1998.

Pawnbroker Hamon Herman, attributed on Monday the increase to the protracted economic crisis. He said the loans ranged from Rp 5 million to Rp 10 million.

He said despite the high interest rates, people preferred pawnshops as they did not have to comply with complicated procedures.

"Unlike banks, we always allow people to take the money once they provide a suitable bail."

Some customers said they relied on pawnshops instead of banks as a source of "quick money".

"I don't care about the interest rate. I need the money to buy my family's daily meals," 47-year-old Ursula Wea said.

Another housewife, Hamsah, said she had twice received loans from the pawnshop to renovate her kiosk.

Petrus Soge, 39, praised the pawnshop for applying simple credit application procedures. A first-timer, his credit application for Rp 5 million was accepted in one day.

"It would take me weeks to obtain the money from banks." (yac)