First of Two Parts
By ATTY. IGNACIO R. BUNYE
September 9, 2012, 10:09pm
MANILA, Philippines — To say that pawnshops have mushroomed all over the country is an understatement.
Despite the presence of a variety of banks, pawnshops still play an important role in the economy by “lending” to people who would otherwise fail to qualify for bank loans.
Pawnshops are popular among Filipinos who are in quick need of money because loans are granted without the need for a credit investigation. The collateral or the pawned item is the sole basis for granting the loan.
However, most of us may still be in the dark about how pawnshops actually conduct their business. In an effort to answer related questions, the Bangko Sentral ng Pilipinas came out with a primer on Frequently Asked Questions on Pawnshops.
I am reprinting the contents of the primer to help financial consumers who want to know more about pawnshop operations.
Frequently Asked Questions on Pawnshops:
What administrative steps or procedure should be followed in opening a pawnshop?
A person who wishes to establish a pawnshop must:
Register his business name with the Department of Trade and Industry (DTI).
Secure a pawnbroker’s license or permit from the local government of the city or municipality where the pawnshop is to be located.
Register with the Bangko Sentral ng Pilipinas before commencing business operations.
What are the maximum rates of interest that a pawnshop/pawnbroker can charge on its pledge loans?
Effective January 1, 1983, interest rates shall not be subject to any ceiling prescribed under or pursuant to the Usury Law, as amended. However, the interest rate that a pawnshop/pawnbroker may collect on its pledge loans must be indicated on the face of the pawn ticket.
Can pawnshops collect interest in advance?
Shane’s Pawn Shop, Inc
413 W. Lincoln Hwy
Chicago Heights, IL 60411
E-mail: Shane’s Pawn Shop
Please feel free to sign up for our newsletter on the Right Sidebar – so you can keep up with our latest updates!
Great deals, pricing, specials, raffles & More!