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Pegadaian sees bullish business as residents needs fresh cash to survive
Hit hard by the ongoing economic crisis, more and more people are turning to pawn shops to raise instant cash
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Hit hard by the ongoing economic crisis, more and more people are turning to pawn shops to raise instant cash.
Public relation manager of state-owned pawnshop operator Perum Pegadaian Irianto said the company had recorded a significant increase in business across all of its branches during the first month of the year.
"In January, we gave Rp 2.8 trillion in short-term credit to our costumers, 15 percent more than the Rp 2.4 trillion we disbursed in December last year and a 30 percent higher than Rp 2.15 trillion we disbursed in January last year," Irianto told The Jakarta Post on Tuesday.
Irianto said that the increase would likely continue as even more visitors were seen coming to the company's branches in February.
"Our branches have reported a significant increase of costumers' in February, but we have yet to calculate our total loan disbursements," he said.
Pegadaian currently runs more than 2,800 branches across Indonesia; 200 branches offer Islamic Syariah loans.
Most of the company's costumers are farmers and traders who need short-term loans to expand their business.
They can pawn their valuables, usually jewelry, electronic goods and motor vehicles with credit tenure ranging between three months and eight months.
The demand for the firm's services is particularly high in the seven days both before and after Idul Fitri, the Islamic holiday which mark the end of Ramadhan fasting month, as people need more money to buy special foods, clothes, and to travel back to their hometowns to celebrate the holiday.
However, the economic crisis has led people to see pawnshops as an easy place to get instant cash.
To accommodate the raising demand of loan disbursement, Irianto said that Pegadaian would establish more branches this year. "By April, we hope we can establish our 3000th branch," he said.
In 2008, the company disbursed on average of Rp 2.75 trillion in loans every month. (hwa)
