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Thursday 27 July 2017
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The Pawnbroking Industry

The pawnbroking industry is an ancient financial firm that has passed through stages of revolution and changes. This is a 3,000-year old loaning industry with a tendency to double in number of pawnshop owners in the next few year. In Britain, pawnshops have doubled over the past four years. Over 22 years ago, the pawnshops have increased from 70 to 2,500 in the United Kingdom. This indeed is a positive impression with the fact that the pawnbroking industry has now become a career business demanding respect where medium scale business owners see as their first point of call and thus, has surpassed the banking industry. Since a major problem of such medium scale business is the constant need of cash-flow, the pawnbroker steps in, ready to give such help without questions.

A pawnbroker is a person who gives secured loans while using personal properties as collateral. These properties that are pawed are referred to as pledges or pawn. Pawnshop is where such service is rendered and generally accepts items of value like jewelry, ranging from gold, silver and diamond, platinum, electronics, tools, television, musical equipment, cameras and also firearms, although this is by permission from local regulatory bodies.

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Pawnbroking started in England during the reign of William the conqueror but with a very mean and vicious attitude towards the usurer, regardless of the priceless services that was offered. Later in 1338, in order to raise more funds for the impending war against France, Edward III had to pawn his jewels. This was repeated during the reign of king Henry V. Several years later, counterfeit brokers began to join the pawnbrokers in London but were put in check during the reign of James I in which an Act was passed against brokers. The target was the counterfeit brokers that specialise in stolen goods.

The pawnbroking industry was not yet to be favoured even with subsequent reigns of Charles I and George II in which an act was made painting the pawnbroker as irresponsible and not trustworthy because they believed the pawnshops also gave rise to high rate of stealing since the thief will almost without being caught have a very good means of selling the goods. Also, it was expected to be a road to bankruptcy since most creditors are often defrauded by others who buy goods on credit and sells them out to ready-to-pay customers.

Positive changes came around to the pawnbroking industry starting from 1800 when an act favouring it was passed under the influence of Lord Eldon who revealed the role the industry played on him when he was a young barrister. With this, interest increased to 12/3% per month from ½% per modern month, making 20% a year unless pending interest were added.

Nowadays, this industry is patronised by 11 million customers unto whom it grants loans with their major prospects from the middle class in recent years who are in demand of a relief finance, often known as a short-term finance. Major reasons why people patronise pawnshops may be to obtain a loan (pawn), buy an item or trade a personal property.




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