Covid-19 prompts rush to pawn shops
Cash-strapped Thais are being forced to sell off their valuables to get by, write Post reporters
published : 9 Apr 2020 at 04:24
newspaper section: News
A 40-year-old woman looks at her blender for the last time before quickly leaving it at a pawnshop.
She does not care whether her kitchen is no longer equipped to prepare her favourite meals, as she has almost run out of money to buy vegetables and meat. Even sadder, it was not long ago when she made her final instalment payment on the appliance.
"I've been delisted and left unemployed," said the woman, who had previously worked at a rubber factory.
Her company has been hit hard by Covid-19, prompting mass layoffs.
The woman, who asked not to be named, is among many residents in Songkhla's Hat Yai district who have flocked to pawnshops after the Covid-19 pandemic ripped through local economies.
Other provinces, including Bangkok, have witnessed a similar situation, with people waiting in long lines to sell off their valuables.
With the daily six-hour curfew and temporary business shutdowns in place nationwide, people are better protected against the coronavirus but more vulnerable to a household liquidity crisis.
In short: Their cash is disappearing fast.
Even workers who had previously never thought of visiting pawnshops are now selling off their possessions to help make ends meet.
State pawnbrokers say the number of clients from Jan 2 to March 31 skyrocketed to 149,108, compared with only 5,605 during the same period last year.
In response, the 39 pawnshops, run by the Social Development and Human Security Ministry, have lent customers 5.2 billion baht, more than 10 times the money granted in the same three-month period year-on-year.
One reason behind the pawnshop rush late last month was a series of measures to tackle the viral threat, ranging from the closing of shopping malls and entertainment venues to the enforcement of an emergency decree to make people stay at home.
One official said their numbers had "peaked" after lockdowns in some cities and especially after the night-time curfew came into effect on April 3.
"We've readied up to 100 million baht to serve people," said Phichaiyot Lensin, the manager of a pawnshop in Hat Yai municipality.
Usually family members tend to pawn off their things near the start of the new school semester in mid-May. But the economic effects of Covid-19 pushed back that timeline, he said.
Among popular valuables are gold ornaments and electric appliances. But some people are also exchanging souvenir banknotes for money.
"These banknotes may hold high spiritual value, but we can only give 60% of their stated value," Mr Phichaiyot said.
In an effort to help those who are cash-strapped, the government has lowered the interest rate from 0.5% to 0.125% on 5,000-baht loans, and is extending the pawning period.
City Hall, which separately runs its own 21 pawnshops in Bangkok, has followed suit, decreasing the interest rate from 0.25% to 0.10% on loans not exceeding 5,000 baht.
Rates on loans of up to 15,000 baht have also been slashed to 0.50%.
"But fewer people are coming in to pay the interest" during this time of pandemic, said Somphit Suphakdi, the assistant manager of a pawnshop in Loei.