The Origin Of Pawnbroking

What is pawn?

Pawn is derived from the Latin word “pignus” which means pledge. In another term it is referred as collateral. Pawn refers to pledging of a personal item as a security to borrow money from the pawn brokers. A pawn broker is an individual or a business who offers secured loans to the people who pledge their personal property as collateral. Pawnbrokers lend money on items which ranges from items such as gold and diamond jewellery, musical instruments, televisions, electronics, tools, household items. Certain pawn shops specialize in some items such as gold or silver items. The loan amount given to the customers are based on the value of the collateral. When the customer pays back the loan amount their item is returned back to them.

The origin of pawnbroking is traced back over decades and decades ago to the Chinese and it is due to the discovery of the Americas Christopher Columbus voyage which was largely funded by the proceeds from pawning jewels of queen Isabella of Spain. In Britain in the latter stages of nineteenth and early twentieth century there were nearly as many pawnbrokers as public houses, lending money on any items. Although pawnbroking had earned an unfair reputation in the past, its image has changed drastically over the past twenty years. The recent expansion in the industry’s affluences came during the 1980’s credit boom and has continued throughout today with customers now preferring to convenient form of high street

For several reasons south Asia has a special place in the history of microfinance. Historically the societies and economies were debt ridden and credit constrained. The major reason for this was due to because south east countries were some of the first major credit schemes for the poor outside in Europe in the early twentieth century. In the late twentieth century, south East Asia was also in the forefront of the revolution in the microfinance, with MFI’s in Indonesia and Thailand reaching larger proportions of the population than their counterparts in any other country except than Bangladesh. The less fact known to the world is that the continuing importance of pawnbroking in south East Asia. In the past the limited savings existed in rural society which mostly took form of gold jewellery in which the pawnshops accepted as security for loans. In Indonesia where pawnbroking became a state of monopoly in 1901, in the 1920s and 1930s the government pawnshops accounted for more than half of all credit dispensed by the popular credit system. Pawnshop loans are truly micro loans which reach to the poor states as well than the other micro financial