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Pawnshop business booms ahead of new school year

Started by thaiga, May 11, 2016, 03:09:38 AM

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Pawnshop business booms ahead of new school year

As the new academic year draws near, low-income parents across the country are flocking to pawnshops to raise needed cash to send their children to school.

Pawnshops are stocking up on cash to serve customers who need extra money for textbooks, uniforms and other school necessities for their children.

The business cycle of pawnshops always peaks ahead of the new academic year, which falls on Monday this year. That means they need to to have more cash on hand for people who may be short on funds but not short in their determination their sons and daughters will get an education.

Mana Kliengthong, director of the Government Pawnshop, an office under the Social Development and Human Security Ministry, said cash reserves have been doubled to 1 billion baht from a year ago for state-owned pawnshops in Bangkok and other provinces.

The increasing cash stockpile was due to expectations that more people in rural areas would need its services as drought hits their pockets.

Private pawnshops do the same, with many increasing cash reserves to over 100 million baht this time around.

State pawnshops charge monthly interest of 50 satang to 1.50 baht, depending on the principal amount. Private operators charge more for those exchanging valuables for cash.

Gold ornaments still top the list of pawned items, but other popular trades include electronic appliances, computers, wristwatches and even eye-glasses.

A farmer using a state pawnshop in Muang district in Yala said on Tuesday that she and her husband could live on 12,000 baht a month from farming. But this was not enough when their niece goes to school, said the woman, who asked not to be named.

The popularity of pawnshops at this year is not a surprise. A poll by the Centre for Economic and Business Forecasting centre released on Tuesday showed 51% of parents said they did not have enough cash to pay all the bills as schools reopen.

The centre expected an extra 49 million baht in cash will be circulated before the school calendar starts,  up 2.3% from a year ago.

The centre, run by the Thai Chamber of Commerce University, surveyed 1,210 people across the country from May 1-6. About 40% admitted to incomes between 10,001 and 20,000 baht and the majority lived in the northeastern region.

Anyone who goes to a psychiatrist should have his head examined.

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