PETALING JAYA: The pawnbroking industry serves as a lifeline for many people who need immediate cash.
Malaysia University of Science and Technology economics professor Geoffrey Williams said such non-bank financial institutions offer quicker access to credit on application to anyone who has collateral.
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“This is why it fits into the broader landscape of non-banking financial institutions,” he said when contacted.
Williams said pawnbrokers are sometimes the only source for low-income earners to obtain loans since they do not have any assets or steady income.
“But wealthy people also use pawnbrokers, especially to pawn gold jewellery, for immediate access to cash.”
While banking and financial organisations provide loans based on an individual’s income, savings, or fortune, Williams said pawnbrokers are unconcerned about this.
“They provide loans against genuine tangible items, which they maintain until the loans are paid or, in the event of default, they keep the collateral.
“This means that anyone who owns anything valuable can use it as collateral for a loan, which is why pawn dealers have survived for so long,” he added.
Williams said pawnbrokers have a strong future but they need to change their image and become a friendly and approachable source of financial help.
