9/10/2023 0 Comments Money pro pawn![]() ![]() ![]() “On the other hand, risks have also increased.” RISKS, RIVALSĪt pawn shops, as well as banks, loan defaults are on the rise. That’s why demand has increased,” said Martine Ma, general manager of Shanghai Hengtong Pawn Broking Co. “The financial crisis has squeezed liquidity, and many companies face an acute shortage of cash. They are all typical of a growing number of business owners in China taking out pawn shop loans to maintain cash flow as an economic slowdown hurts sales and as banks become more cautious toward small lenders. And a construction company owner hocked his villa to get a loan to pay workers’ salaries. A real estate developer gave his unsold properties as collateral to get an emergency loan while waiting to secure bank funds. They remained outlawed for two decades, until 1987, but they are now doing a brisk trade.įrom gold bullion to houses and factory equipment, customers are offering all sorts of assets to get loans from pawn shops.Īn auto dealer pawned his downtown apartment against a 4 million yuan ($585,000) credit line to secure funds for his business. “But we have a lower threshold and can provide loans much more quickly and with shorter terms.”īanned at the start of the cultural revolution, pawn shops were considered a form of capitalist exploitation preying on poor and desperate people. “Banks are reluctant to lend,” said Huang Jing, deputy business manager at Shanghai Oriental, the city’s second-biggest pawn shop. With China’s economy stumbling along at its slowest growth in seven years and banks wary of lending as defaults rise, small business operators are hocking belongings and company assets for loans from pawn shops. There’s a shortage of liquidity in the market,” said Zhang, whose business is in Wenzhou, in eastern China. ![]() “The financial crisis has an obvious impact on our businesses. In this case, he paid off the loan a few days later when a customer made payment on a big steel purchase. Turned away by banks caught in the credit crunch, Roger, like many Chinese businessmen, borrows from pawn shops instead. Workers check jewellery and watches at the Oriental Pawn shop in Shanghai February 9, 2009. ![]()
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