Business Brisk At Phuket City Pawnshop

[webfact]

Business brisk at Phuket City Pawnshop

The service desk at the Phuket City Municipality Pawnshop. File photo.

PHUKET: -- The general state of the economy – not World Cup gambling – is responsible for brisk trade at the Phuket City Municipality Pawnshop, officers say.

The shop, on Kamorapat Road in Phuket Town, currently has 480 million baht out on loan to 31,280 customers, according to a release by the municipality.

Borrowers appear to be pawning more valuable items, as the amount currently out on loan is a 22% increase over the same time last year while the number of customers is up just 4% .

May and June, which mark the start of the new school year, were the months with the largest loans issued: 91 million baht and 89 million baht, respectively.

Given the current trend, Phuket City Municipality will make 90 million baht in loans available for each of the last six months of 2010.

On a loan of 5,000 baht, interest is 0.75% per month. From 5,000 baht to 30,000 baht it’s 1%, while on loans of 30,000 baht to 100,000 baht interest is 1.25% per month.

The maximum redemption tickets offered are for 100,000 baht and customers are limited to five each, for a maximum loan amount of half a million baht.

Apiwat Chaiyakul, manager of the Phuket City Pawnshop, said that the bad economy – not gambling during the World Cup – had forced people to borrow. The service is popular among both rich and poor people who face liquidity problems, he said.

Gold ornaments comprise 98% of all the pawned assets, with small numbers of mechanical tools and electrical appliances also accepted as collateral.

Phuket City Municipality Mayor Somjai Suwansupapana said the pawnshop continues to operate debt-free because of the ease with which unredeemed gold items can be sold.

-- Phuket Gazette 2010-08-04

[keeniau96]

I would be very glad to loan out at 1%/month secured by gold necklace etc. Particularly when can borrow from BOT at less than 2%/year.

But I am sure this is better than what the loan sharks offer.

[upena]

Kind of contradicts all the "feel good' stories of late about rising economy, more tourists, financial investments up, etc.

[vont]

Kind of contradicts all the "feel good' stories of late about rising economy, more tourists, financial investments up, etc.

The pawn shop biz and its customers are not representative of Thai economy nor the Thai biz community nor her general biz atmosphere.

There is always a segment of the population who needs emergency cash for whatever reasons.

The various financial inputs provided by current govt agencies do provide temporary relief for many depressed segments.

Imho.

[LivinLOS]

There is always a segment of the population who needs emergency cash for whatever reasons.

However when that segment is rising, and also needing more (22% more) both would be negative indicators, not positive ones.

[vont]

There is always a segment of the population who needs emergency cash for whatever reasons.

However when that segment is rising, and also needing more (22% more) both would be negative indicators, not positive ones.

It is obvious that the distribution of wealth is disproportionate and very much skewed to the right hand of the distribution curve.

The redshirts have a valid point that the distribution of wealth in Thailand needs to be addressed. lol