Pawnshops offer financial services known as micro-lending which is an important source of credit in many developing countries, especially in Asia. Pawnshops can provide these financial services to poor and low-income households for a variety of reasons. One is that pawnshops fall under less regulation than other financial institutions. Pawnshops used to operate like a sari-sari store with very little government control. In fact the only time these units came into contact with government agencies was when they paid business registration fees and income taxes.
They were not even covered by the usury law enacted in 1916. (Mario Lamberte – 1988) Another reason pawnshops can provide these financial services to poor and low-income households is that their loans are backed by hard assets which lowers the transaction cost to the borrower and the lender and eliminates the need to analyze the borrower’s creditworthiness.
Over time the pawn item has changed. In the past, for example, Mario Lamberte noted (1988) that “pawnshops have preferred lees bulky items high-value items like jewelry.
With the advent of more competition pawnshops have broadened the type of items they accept as collateral” (page 14). This change continues today with the acceptance of computers, cell phones and other electronic devices as collateral. Because of the efficiency of pawnshop operations, they have been shown to be a profitable business.
A study for the Philippine Institute for Development indicates that efficient management of pawnshops allows 25% of the gross operating income to flow to the bottom line as net profits (Lamberte, 1988). In 1999, there was one (1) pawnshop for every 8,756 people in the country and today in the Philippines there are more than 10,000 registered pawnshops and 5,000 pawnshop owners according to BSP that is up close to 3000 Pawnshop in 2000.
This figure far exceeds the number of banks and bank owners in the country.
Remember! This is just a sample.
You can get a custom paper by one of our expert writers.
Get your custom essay
Helping students since 2015
Essay Writing Service Features
Our Experience
No matter how complex your assignment is, we can find the right professional for your specific task. Contact Essay is an essay writing company that hires only the smartest minds to help you with your projects. Our expertise allows us to provide students with high-quality academic writing, editing & proofreading services.
Free Features
Free revision policy
$10Free bibliography & reference
$8Free title page
$8Free formatting
$8How Our Essay Writing Service Works
First, you will need to complete an order form. It's not difficult but, in case there is anything you find not to be clear, you may always call us so that we can guide you through it. On the order form, you will need to include some basic information concerning your order: subject, topic, number of pages, etc. We also encourage our clients to upload any relevant information or sources that will help.
Complete the order form
Once we have all the information and instructions that we need, we select the most suitable writer for your assignment. While everything seems to be clear, the writer, who has complete knowledge of the subject, may need clarification from you. It is at that point that you would receive a call or email from us.
Writer’s assignment
As soon as the writer has finished, it will be delivered both to the website and to your email address so that you will not miss it. If your deadline is close at hand, we will place a call to you to make sure that you receive the paper on time.
Completing the order and download