Borrowers refused by banks turn to pawnbrokers

Friday 27th January 2012

In a telling sign of the times, a high street pawnbroker has announced plans to open 50 new shops this year, creating 300 new jobs.

The Money Shop said it has been having its busiest January ever, with rising demand for its services.

Trade body the National Pawnbrokers’ Association says the industry is growing 10% a year.

Late last year, The Money Shop opened its 450th outlet, offering customers instant loans against the value of goods such as gold, watches and jewellery.

The company said its growth comes as people find it increasingly difficult to borrow from banks, and with the value of gold growing.  

Gold makes up to 95% of The Money Shop’s pawnbroking trade, and is expected to increase: a nine-carat gold bracelet with an insurance value of £1,000 in November 2010 might have secured a short-term loan of up to £350 at the time.Now the same piece could be worth £1,260 and result in a loan of £450.



Neil Surgenor, head of pawnbroking at The Money Shop, said people increasingly see pawnbroking as another way of raising money: “We have witnessed an influx of people who have been refused credit by their banks and are unable to take out unsecured loans. 

“The difference between pawnbroking and other short-term loan solutions is that customers view it as borrowing from themselves.  

“In fact, 80% of our customers come back for their pawned possessions. Of those that default on their loan, any money made over and above the cost of the item and the interest owed, once sold at auction, is returned to the customer.”