Pawnshops hit paydirt as Southeast Asians sweat before pay day
By Eveline Danubrata and Khettiya Jittapong
SINGAPORE/BANGKOK (Reuters) - Faced with rising living costs and unable to wait until pay day, growing numbers of Southeast Asians are putting their gold jewelry and designer watches in hock, creating a boom in pawnshops across Singapore, Malaysia, Thailand and Vietnam.
In a sign of the times, the cast of U.S. reality TV show "Pawn Stars" paid a visit last month, promoting their show in a region where the industry is on the ascent.
Pawnshop businesses are also in flavor with investors. The share price for Singapore's MoneyMax Financial Services Ltd stands around 30 percent higher than its initial public offering last month.
These companies are trying to shake off their image as lenders of last resort to the desperate. But their newfound success may signal trouble for Southeast Asian economies, as pawnshops and other similar businesses typically outperform when household budgets are strained.
Inside an outlet of Cash Converters on the east side of Singapore, a golden statue of the Laughing Buddha sat alongside branded handbags, an old violin, electronic goods and cases full of diamond rings. Young and old customers were having items valued at the counter, while buyers hunted for a bargain.
"As the economy gets a bit tighter, we are definitely getting more customers coming in," said Jeremy Taylor, Southeast Asia managing director for the company.
"Southeast Asia was quite protected from what was going on in Europe, but now when we see China slowing down a little bit, then things start to get a bit more tense."
Cash Converters is a franchised network offering pawnbroking loans in certain markets like Australia, but in Singapore and Malaysia it specializes in buying and reselling second-hand goods. Continued...