Pawnshops evolve as key players in financial inclusion initiatives
While pawning as an industry has struggled with the negative perception that it preys on the needs of the poor and middleclass people, it has now evolved and raised its stature as a key player in government’s thrust to widen financial inclusion in the country.
In fact, pawnshops have become one of the biggest supporters of the Bangko Sentral ng Pilipinas’ program in promoting microfinancial services and providing financial access to the poor and micro and small entrepreneurs, something that is not otherwise possible via banks and bigger financial organizations.
Contrary to misconceptions, local pawnshops are highly professional organizations that follow the strict code of operations based on BSP guidelines and comply with the Securities and Exchange Commission’s strictest requirements on corporate governance.
An April 2016 study by Ken Research Private Ltd reveals that 90 percent of local households need less than US$10 (P500) to make it through the day. As communitybased microfinancial institutions, the more than 17,000 pawnshops in the country have become a viable option for households in need of quick cash.
“Pawning has become instrumental in changing Filipinos’ lives as it proves to be the fastest and easiest means to get access to cash. This can be traced back to the days of ancient China and even today, in the age of computers and technical advancements, the value of pawning does not change or diminish, especially when it evolves with the changing times,” said Jean Henri Lhuillier, president and CEO of Cebuana Lhuillier.
Most established pawnshops implement guidelines to protect the integrity of the microfinancial institution and their clients. These include items to be pawned being subjected to strict quality checks and appraisal procedures. They make use of technology to provide a quick, easy and efficient pawning process that takes up just five minutes. Strict security procedures are also followed to ensure the safety of pawned items.
Modern pawnshops also offer remittance and bills payment services to become one-stop shops for microfinancial needs. The bigger ones like Cebuana Lhuillier even have customer service teams to handle queries and concerns, and loyalty programs to reward regular patrons.