The other day, I was talking to li jiuan about the pawn shop business in Singapore. I notice that Maxi-Cash a chain pawn shop operator positions itself different from others. It is uncommon to see advertisements on pawn shop in Singapore media, but Maxi-cash does it different, they have been publicizing heavily on TV and having mediacrop artiste endorsing for them.
Then we were discussing, how do pawn shop actually work? is it a legal loanshark? does it work like a bank?
Maybe it really works almost like a bank -
For example: A pawn shop
A customer goes to a pawn shop with his jewelery
Pawn it > collect cash (less than market value)
if the customer return with cash within the redemption date (usually 3 months) to redeem his jewelery then he just need to pay some interest on top of his principle
otherwise if it passed the redemption period the pawn shop is free to auction off the item.
In a bank, it works the same
A customer used his house as mortgage – takes up a loan
if he pays up on time (principle and interest) , he gets back his deed otherwise he loses his home. Continue reading