- Title: THAILAND: Economic slowdown brings boom time for Thailand's pawn shops
- Date: 9th September 2013
- Summary: BANGKOK, THAILAND (RECENT - AUGUST 27, 2013) (REUTERS) EXTERIOR OF EASY MONEY, THAILAND'S BIGGEST PAWN SHOP PAWN SHOP STAFF SITTING BEHIND COUNTER BANGKOK, THAILAND (SEPTEMBER 6, 2013) (REUTERS) MAN HANDING JEWELLERY TO PAWN SHOP STAFF PAWN SHOP STAFF EXAMINING GOLD MAN SPEAKING TO STAFF MEMBER BANGKOK, THAILAND (RECENT - AUGUST 27, 2013) (REUTERS) ITEMS ON SHELF CUSTOMER RECEIVING MONEY/WALKING OUT PAWN SHOP STAFF HANDING MONEY TO CUSTOMER CUSTOMER RECEIVING MONEY FROM STAFF WATCHES ON DISPLAY BANGKOK, THAILAND (RECENT - SEPTEMBER 3, 2013) (REUTERS) (SOUNDBITE) (Thai) 40-YEAR-OLD CUSTOMER SUKANYA BOOMEE, SAYING: "The cost of living is getting higher. I have more expenses. I chose to come here because it's faster than the bank." CUSTOMER RECEIVING MONEY MAN LOOKING AT VALUABLE ITEMS ON SHELF GOLD AND DIAMOND RINGS CUSTOMER RECEIVING MONEY BANGKOK, THAILAND (RECENT - AUGUST 27, 2013) (REUTERS) SITTHIWIT THUNGTANAKIAT, MANAGING DIRECTOR OF EASY MONEY, WALKING INTO VAULT VARIOUS OF VALUABLE ITEMS ON DISPLAY (SOUNDBITE) (Thai) MANAGING DIRECTOR OF EASY MONEY SITTHIWIT THUNGTANAKIAT, SAYING: "Customers have been supporting us for a long time. Our business growth is around 50-60 percent per year. We are expanding and opening several branches in many provinces." BANGKOK, THAILAND (RECENT - SEPTEMBER 5, 2013) (REUTERS) VIEW OF BANGKOK PEOPLE WALKING IN BUSINESS AREA PEOPLE WALKING IN MARKET WOMAN PAYING IN CASH BANGKOK, THAILAND (RECENT - SEPTEMBER 3, 2013) (REUTERS) CHIEF ECONOMIST OF SIAM COMMERCIAL BANK SUTAPA AMORNVIVAT SPEAKING (SOUNDBITE) (Thai) CHIEF ECONOMIST OF SIAM COMMERCIAL BANK SUTAPA AMORNVIVAT SAYING: "Commercial banks have tightened their underwriting policies, even though there are many people who want to borrow money banks are more careful in giving out loans." MAN STANDING AT COUNTER HANDS COUNTING MONEY (SOUNDBITE) (Thai) CHIEF ECONOMIST OF SIAM COMMERCIAL BANK SUTAPA AMORNVIVAT SAYING: "Another reason is because, in the past couple of years, the price of gold has been at its highest, so people pawn their gold, and also the shops want to buy them." BANGKOK, THAILAND (RECENT - AUGUST 27, 2013) (REUTERS) VARIOUS OF PAWN SHOP STAFF CHECKING GOLD BEHIND COUNTER AMULETS ON SHELF VARIOUS OF LOUIS VUITTON BAGS ON SHELF
- Embargoed: 24th September 2013 13:00
- Keywords:
- Location: Thailand
- Country: Thailand
- Topics: Business,Economy,Politics
- Reuters ID: LVADXRZBO95X2MWG40TBZCVANGP6
- Story Text: A growing number of Southeast Asians relying on their gold jewellery or designer watches to tide them through until pay day is creating a boom for pawn shops, with the number of stores in Singapore, Thailand and Vietnam rising sharply.
Pawn businesses are trying to shake their image as lenders of last resort to the desperate, but their new-found success may signal trouble for Southeast Asian economies.
Pawn shops tend to outperform when household budgets are strained. People who don't qualify for bank loans are turning more and more to them as alternative sources of finance.
"The cost of living is getting higher. I have more expenses. I chose to come here because it's faster than the bank," said 40-year-old pawn shop customer Sukanya Boomee.
Many pawn shops have swapped the traditional grille-fronted store, which may be intimidating to customers, for a sleeker and more modern look. Customers also cite the convenience and flexibility to redeem their items when their cash flow improves.
Easy Money, Thailand's largest private pawn shop operator, has seen in recent months a 15-20 percent rise in customers, especially in areas near Bangkok, said Managing Director Sittiwit Tangthanakiat.
The company, operated by privately-owned Tungthanasin Co Ltd, has posted an average growth rate of 50-60 percent a year in the value of pawned assets since it opened in 2005.
It has also more than doubled its outlets to 27 nation-wide from 12 last year, and plans to open two more next year.
"Customers have been supporting us for a long time. Our business growth is around 50-60 percent per year. We are expanding and opening several branches in many provinces," Sittiwit said, estimating that Thailand's pawn shop industry was worth up to 170 billion baht ($5.3 billion) a year.
The Central Bank of Thailand announced in June that household debt had increased nearly 80 percent of gross domestic product, up from 77.5 percent in March and among the highest in Asia. A decade ago it was 45 percent.
An economist said banks' tighter lending policies had driven many to seek out loans at pawn shops.
"Commercial banks have tightened their underwriting policies, even though there are many people who want to borrow money banks are more careful in giving out loans," said Sutapa Amornvivat, Chief Economist at Siam Commercial Bank.
She added that the rising price of gold also contributed to people being more willing to pawn their jewellery.
"Another reason is because, in the past couple of years, the price of gold has been at its highest, so people pawn their gold, and also the shops want to buy them," she said.
Thailand has more than 400 privately-owned pawn shops, mostly family-run, and another 54 state pawn shops run by government agencies. - Copyright Holder: REUTERS
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