P6.8-B subsidies via pawnshops
With presence in 82 percent of the country’s local government units, pawnshops serve as cash-out agents
Pawnshops played a stellar role in distributing cash aid from government as such establishments managed to farm out over P6.8 billion in pandemic aid to 983,505 beneficiaries as of the end of last year.
Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno indicated that pawnshops have a “sizable share” in the distribution of the financial assistance that was crucial in the government efforts to contain the spread of the virus particularly during the lockdowns last year.
Pawnshops play a key role in inclusive finance because of their extensive network that serves as financial access points for low-income individuals.
“With presence in 82 percent of the country’s local government units, pawnshops serve as cash-out agents for banks and EMI (e-money issuers) in distributing government financial assistance during the pandemic,” Diokno explained in a virtual briefing on Wednesday.
New-found role
“Pawnshops play a key role in inclusive finance because of their extensive network that serves as financial access points for low-income individuals, small businesses and social amelioration beneficiaries,” he added.
Data from the central bank showed the pawnbroking industry’s footprint at 1,348 cities and municipalities nationwide with head offices and branches reaching 14,641 or a 5 percent expansion from last year’s.
Still, the BSP chief said that the operations of pawnshops are evolving with 83 percent of their branches and offices venturing into remittance and money-changing activities as of end-2020.
“The pawnbroking industry remains optimistic that it will continue to be resilient amid the current crisis. Going in its favor is its continued extensive reach, especially in rural areas, as well as its varied services,” Diokno said.
“As they diversify their services, pawnshops are seen to continuously adapt to the expected rise in digital financial transactions,” he added.