In recent years, Singaporeans have been acquiring more loans through pawn shops. While traditional loans are still the more popular choice, pawn shops can be attractive due to their quick cash disbursal without a credit check or income requirements and ability to lend to foreigners. During the circuit breaker, it was expected that pawn shops would lose some of their business due to closures, but their fast recovery was on pace with recent trends, and August 2020 showed the highest borrowed amount over the past year. How has the relationship between pawn shops and their customers changed during COVID-19, and are they a suitable alternative to traditional lending during a time of economic uncertainty? We explore this trend below.
Pawn Shop Loans Fell 42% During COVID-19 but Recovered Quickly
As Covid-19 began to spread across the world, stay-at-home orders were implemented by governments to protect the population. Singapore’s circuit breaker ordered restricted movement of people and non-