Pawnbroking Around The World

Pawnbrokers have been in business for thousands of years and can be found all over the world. Customers come to them, hand over their item for pawn, and receive cash in return when they are short of funds. While most of the NPA’s members are located within the United States, the association has over 40 members from outside the country. They hail primarily from Canada and Mexico, but also Aruba, Australia, Guatemala, Kazakhstan, New Zealand, the Philippines, and Sweden.

We talked with three of our international members – Jean Henri D. Lhuillier of Cebuana Lhuillier in the Philippines, Peter Sundstrom of Pantbanken Sverige in Sweden, and Sean O’Connor of SuperLoans in New Zealand – to learn about the similarities (and the differences) of pawnbroking around the world.

Similarities

There are a number of similarities between these countries and the U.S., such as the redemption rates, the type of items pawned, the working hours, and licensing requirements. For example, the number of pawn loans redeemed ranged from 80-90 percent; the average U.S. redemption rate is 85 percent.

Most pawn stores in New Zealand are open Monday – Friday with some Saturday hours. The same holds true for Sweden with some stores open on Sundays. In the Philippines, there are even a few stores that are open 24 hours.

Pawnbrokers in the Philippines, New Zealand, and Sweden are all required to be licensed and must follow governmental regulations, such a presidential decree or a legislative act.

Items taken in for pawn are also similar to those in the U.S. Gold jewelry, electronics, watches, and power tools are the primary merchandise seen by these pawnbrokers.

Pawnbrokers in other countries, like those in the U.S., face added security risks. They, too, must take extra precautions and measures to deter criminals by using electronic security systems, alarms, 24/7 monitoring, and guards. In Sweden, they have installed glass walls between customers and staff for increased protection.

Differences

While there are many similarities, there are some differences among pawnbrokers in other countries. For example, New Zealand has only 41 pawn stores in the entire country and Sweden has just 62 (owned by 25 companies). On the other hand, the Philippines has over 16,000 pawn stores.

While the average pawn loan in the U.S. is $150, it is $250 in New Zealand. In the Philippines, it ranges from $350-$400 and, in Sweden, the average pawn loan is $500.

Another difference between these countries and the U.S. is that there is no cap on the interest rate. In the Philippines, pawnbrokers are encouraged to “keep it within the market”. In Sweden, most pawnbrokers charge from 3-3.5 percent per month, but there is no exact cap.

The number of multiple stores owned by one company is another variance. In the Philippines, most pawnbrokers have more than one store. In New Zealand, most owners have only one store, with just a few franchised stores in the country.

Despite these differences, one thing remains the same. No matter where they are in the world, pawnbrokers provide a much-needed resource to those who are short of cash.