Belgium's state-run pawn shop invests for the future
By Barbara Lewis
BRUSSELS (Reuters) - Whether it's a diamond ring, a designer watch or a first edition of a Tintin cartoon, every one of the rising number of lots to go under the hammer in the auction room of Belgium's oldest financial institution tells a poignant tale.
Even the auctioneer says he feels the pain of the reluctant seller, who has parted with a prized possession to pay a medical bill, finance a school trip or, in extreme cases, to buy food.
Etienne Lambert, head of the centuries-old state-backed micro credit institution Le Mont de Piete (literally the Mount of Piety), says it troubles him that business is good.
"The poorer the city, the richer the Mont de Piete. And we are uncomfortable with that," Lambert said.
Set up nearly 400 years ago in 1618 to combat usury and lend at the lowest rates to the indigent, Brussels's Mont de Piete, a state-regulated pawnbroker run on a charitable basis, used to be one of many.
Now it is the sole survivor in Belgium and has the monopoly on what is known as "le pret sur gage" (pledge-backed loan). No other pawnbrokers are legal in the country.
It says the monopoly allows it to avoid commercial interests and loan below the market rate.
To protect its status, the Mont de Piete has begun legal action against Cash Converters, an Australian firm with outlets in Belgium that buys second-hand goods and gives clients an option to buy them back within a month. Continued...