Have you wondered why the Philippines are getting so much attention for their local pawn shop industry?
According to Reuters, the Philippines has one pawn shop for every 3,200 adults. And this number is only growing. But why?
Read on to learn more about the Philippines’ pawn culture and get a glimpse into a foreign pawn industry.
Why Pawn Shops Are So Popular in the Philippines
According to their central bank, Bangko Sentral ng Pilipinas, “72 percent of Filipinos have gone to pawnshops over the last 12 months, not only to pawn a property, but also to pay bills or send or receive remittances.”
One of their surveys showed that 34% of the municipalities in the Philippines don’t have banks.
The banks are reluctant to open branches in rural areas that are torn apart by conflict or low income. This has contributed to a 69% unbanked population.
Naturally, pawn shops in the Philippines have become the primary means of accessing financial services. On top of this, credit ratings are not standard in the country.
The Filipinos are also increasingly utilizing the internet to pawn their items, much like Americans do in the U.S. with PawnGuru.
This might be attributed to growing smartphone adoption.
Despite high levels of poverty, a relatively large portion of the population now owns a smartphone. Smartphone ownership among Filipinos has more than doubled in the past 4 years, according to Nielsen.
With technology expanding to more and more people, this makes pawning an even more frequent activity. The internet opens up more opportunities for communication with pawn shops and deals get closed faster.
What Pawn Shops Are Like in the Philippines
Pawn shops in the Philippines traditionally have consisted of mainly jewelry. However, in recent years, more and more different types of items are being pawned. Much like here in the U.S. Designer bags, electronics and other items are popularly pawned throughout the country.
The way pawn shops are being used is also quite noteworthy. In the Philippines, people are not only using pawn shops to use their possessions as collateral for cash. They’re also using pawn shops to send and receive money quickly. Pawn shops are being used for foreign currency exchange services. They’ve essentially come to mimic banks in many different aspects.
While pawn shops in the US and the Philippines share some similarities, you can see there is a remarkable difference. Now that you’ve caught a glimpse into what pawn shops are like in the Philippines, you might be interested in reading some of our other articles. Feel free to browse some of these that we’ve listed below!