Pawnbrokers in Singapore Puzzled With Surge in Gold Redemption Amid Coronavirus Outbreak

Pawnshops Marked an Increase of 10-15% in Number of Customers Arriving to Redeem Their Valuables

People usually loan money from the pawnshops by bringing their valuable items which they can leave with pawnbrokers. These days in Singapore, more people are arriving at pawnshops to redeem their gold jewelry than pawning their items for cash.

In order to help by providing cash to those with financial needs, pawnbrokers are baffled with the trend whose shops remain open. Businessmen at shops have marked an increase of 10 to 15 percent in the number of people coming to redeem their items than pawning their valuables, Ivan Ho, president of the Singapore Pawnbrokers' Association, said.

More than half of daily Singaporean customers are coming to redeem their pawns. Closure of gambling outlets could be one of the reasons contributing the uptick, suspects Ho, who also runs Heng Seng Pawnshop at Toa Payoh Central. "It could be because Singapore Pools has shut, and so some people have found themselves with extra cash from not placing their usual bets," he said.

Pawnshops Offer Interest Waivers

Gold Jewelry
Representational image pixabay

Those affiliated with the association have even developed a plan to waive the interests. It offers waiving of interest upon redemption or renewal for all pawns pledged before April 6 if the pawn period exceeds a month.

Pawn tickets that expired on or before May 4 have also been given one month of extension from the date of expiry with no interest for redemption or renewal if the pledge is not forfeited. Business appeared to be brisk at Toa Payoh Central on May 19, as reported by The Straits Times.

Several customers found with extra cash with themselves decided to redeem their items according to The New Paper. An elderly man who declined to be named said, "It's a good thing the pawnshops are still open because I could redeem my item with the extra money from the Government instead of having to renew my pawn loan."

Reason Behind Uptick

Representational image Wikimedia Commons

An economist at Singapore University of Social Sciences, Walter Theseira finds it difficult to identify the specific reason for the trend. One of the reasons could be gold, which is more valuable than cash during crises as prices might go up in the future, he said. Another reason he suggested was, people deliberately keep low cash in financial tight circumstances to limit their spending.

The third reason Theseira suggested was, people, are worried about their lives. In case if something happens to them, their family can be left with something in their possession.

Related topics : Coronavirus