Pawnbroker targets 50 new outlets as demand increases

MIDLANDS-based pawnbroker and money lender, The Money Shop, has announced plans to open 50 new shops in the UK this year due to rising demand for its services.

The company, which opened its 450th shop late last year, said that as banks continued to clamp down on lending and the cost of living grew, people were finding it increasingly difficult to borrow small amounts of cash.  As a result, pawnbroking, which offers instant short-term loans on valuables such as jewellery, gold and watches, was experiencing a resurgence.  

It said the industry was growing by 10% a year with a new shop opening every week in the UK, according to the National Pawnbrokers’ Association.  

The Money Shop, part of the largest network of pawnbrokers in Europe, said it had experienced its busiest ever January and the trend look continuing, hence the need for the new outlets, which are expected to create more than 300 jobs.

The gold market is particularly buoyant due to the high price of the precious metal.
Gold makes up to 95% of The Money Shop’s pawnbroking trade, and is expected to increase as more and more people recognise the opportunity to turn an unused asset into cash.  

As an illustration, 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 a loan of £450 might be offered.

Neil Surgenor, head of pawnbroking at The Money Shop, said: “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.”

He said negative stereotypes of the pawnbroking industry were fast declining and a post-ebay generation had emerged, one that is more open to pawning.

“They see it as just another way of borrowing,” said Mr Surgenor.

The Money Shop is owned by Dollar Financial UK, which in addition to the high street outlets also operates online lending services through its Month End Money and paydayuk.co.uk brands; business loans, through Merchant Cash Express; jewellery and pawnbroking through its subsidiaries at Suttons and Robertsons in London, Duncanson and Edwards in Edinburgh and Robert Biggar in Glasgow.  It employs more than 2,100 staff in the UK.