State pawnshop planning major business expansion this year
State pawnshop planning major business expansion this year
Urip Hudiono, The Jakarta Post, Jakarta
State-owned pawnshop company Perum Pegadaian plans to expand its
business this year by accepting the pawning of shares in listed
companies -- in addition to other belongings -- from its
customers, a company official said.
Other corporate plans for the year, explained Pegadaian's
director of finance Budhiyanto in a press conference on
Wednesday, would include the establishment of its Islamic-based
(sharia) rural credit agencies and a move into the land property
business.
"We have decided to accept the pawning of stocks as we are
seeing a market potential in it," Budhiyanto said. "Shareholders
occasionally have the need for immediate funds through pawning
too."
Although Pegadaian was still working out the details of the
stock-pawn scheme and coordinating with related stock exchange
authorities about it, the scheme would hopefully be available to
its customers by the second half of this year, Budhiyanto said.
Budhiyanto further explained that Pegadaian would most likely
accept the pawning of bluechip stocks only.
"We will only accept stocks which are prime and liquid, such
as bluechip stocks or the top-ten most liquid stocks in the
market," he said.
Funds lent to customers for the pawning of the stocks,
meanwhile, will be limited to a maximum of 50 percent of the
stocks' value.
"If the value of a stock happens to fall, say from Rp 10,000
to Rp 7,000, the customer who has received a loan worth Rp 5,000,
will have to pawn more stocks until their total value is Rp
10,000 again," Budhiyanto said, adding that the tenure of the
credit will also be short-term -- only three to four months.
Last year, Pegadaian accepted from its customers the pawning
of 11 million items of various values, totaling more than Rp 9
trillion (US$1.06 billion), as well as Rp 8.9 trillion in short-
term loans, giving it a profit of Rp 174 billion, up 18 percent
from the previous year.
For 2004, the company expects to lend Rp 10.8 trillion in to
customers, and obtain Rp 198 billion in profits. During this
year's first two months alone, Pegadaian managed to cater Rp 2.4
trillion in credits, or 22 percent of its target for the whole
year.
Concerning Pegadaian's plan to establish sharia rural credit
agencies, Budhiyanto explained that it was in accordance with the
company's efforts to grab a share in the emerging sharia
financing market and its focus on providing loans for small
enterprises.
"Funds for the initial operation of the credit agencies, as
well as our other business expansion plans for this year, will be
taken from the repayment of our state bonds worth Rp 200 billion,
and from a loan of Rp 300 billion provided by Bank Mandiri and
Bank BCA," he said.
Pegadaian cooperated last year with Bank Muamalat in
converting 16 of its pawnshops into sharia stores. The company
now has 40 sharia pawnshops, out of its total 785 across the
country.
As for Pegadaian's move into the land property business,
Budhiyanto said the company was aiming to eventually become a
provider of home mortgages.
"But in the meantime, we will probably start off by offering
mortgages for our property of kiosks and shophouses at the Harco
Pasar Baru market in Central Jakarta," he said.