The Success Factors Of Pawn Shops Finance Essay

The pawnbroker’s shop is where people apply for money loan by giving the pawnbroker’s shop a pledge. Pledge is any movable thing that can be carried. The most common thing used as a pledge is jewellery, but some of the pawnbroker’s shops besides accept telecasting, camera, picture Cam and even cell phones.

The word “ Pawn ” comes from the Latin word “ PATINUM ” which means fabric or vesture. During early centuries, in Europe, when people borrowed money, the collateral they used was their apparels. Pawn broking was in being in the ancient Roman and Greek civilisations. The first formal pawnbroker’s shop concerns were in China. They originated in Buddhist monasteries, where the involvement was normally at 3 % or less.

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By 1812 AD there were at least 20,000 pawnbroker’s shops in China. In the 1970 ‘s, Chairman Mao and his Red Army eliminated all the pawnbroker’s shops along with other private endeavors. Recently pawnshops started doing a rejoinder, make fulling the spread in their national banking system, imparting money to people who earn plenty to hold bank histories. Pawnbroker’s shops were so respected by the Chinese population that they named, Kwan Tai, one of their Supreme beings, the “ Patron God of Pawnshops ” .

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Pawn broking is one of the oldest recognition agencies in the Philippines. Many people believed that the Spanish mendicants have introduced it when the Philippines was still ruled by the Spaniards.

In order to modulate the operation of pawnbroker’s shops and all their existing Torahs, regulations and ordinances impacting their operations, the joint IMF-CBP Banking Survey Commission on the Philippines Financial System recommended to hold a jurisprudence regulating all the pawnbroker’s shops runing in the state. Presidential Decree No. 114 was promulgated to cover all the facets on how to set up, and the operation of pawnbroker’s shops. It besides states that the Central Bank of the Philippines was charge with the undertaking and duty of modulating the operation of pawnbroker’s shops.

Background of the Study

Filipinos patronize pawnbroker’s shops as one of the alternate beginning of recognition and with the increasing Numberss of pawners, people should be cognizant of the pawnbroking minutess, auction sale and some pertinent information that will cut down the hazard of pawning and purchasing of cursed articles.

The loan is frequently a fraction of the monetary value of the original point such as 50 per centum. Some of the regulations are built to protect the possible pawn store client and others are designed to do certain that any goods that are stolen, that might be wittingly purchased by a pawnbroker’s shop, can be traced back by the marketer, and possible stealer. Pawnshops and look into loan topographic points are worse than yard gross revenues for a assortment of grounds.

Pawnbroker’s shops still offers low market rates for anything that is pawned. Peoples borrow money Y seting their things or seting up something they own as collateral, selling used ware, and purchase new and used ware. Pawnbrokers lend money on points of value runing from gold and Ag or diamond jewellery to tools, telecasting, musical instruments, family points and more. These things or points maintain their value over a sensible period of clip and easy to hive away like jewelleries. If you do non pay back with involvement on it, they will sell it for dual what they gave you.

The research workers choose Mandaluyong City because deemed as the “ Shopping Mall Capital of the Philippines ” because of its noteworthy figure of shopping and amusement hubs. They have chosen Mandaluyong where Kalentong Street is located. It is a topographic point with a immense figure of pawnbroker’s shops that can fulfill the demands of people in pawnbroking.

Statement of the Problem

This research survey will look into on the success factors of pawnbroker’s shops at Kalentong, Mandaluyong City. It will besides seek to reply the undermentioned inquiries.

What are the strengths of the pawnbroker’s shops?

What are the failings of the Pawnshops?

What are the chances of the Pawnshops?

What are the menaces confronting when come ining in this field of concern?

What are the pledge/pawn often received?

Is there a important difference among sentiments of the respondents sing the strengths and failings of Pawnshop when group harmonizing to gender?


Null Hypothesis:

That there is no important difference among sentiments of the respondents sing the strengths and failings of Pawnshop when grouped harmonizing to gender.

Alternate Hypothesis:

That there is a important difference among sentiments of the respondents sing the strengths and failings of Pawnshop when grouped harmonizing to gender.


A Establishing concern holding good staff is what a pawnbroker’s shop needed. Having aA good selling planA can non be achieved without holding individuals who were capable in managing such place needed in funding business.A A A A

PawnshopA can be classified as a funding firm.A A There is a demand of holding a good relationship between the client and the staff.A A An organisation needs to develop a long-run, cost effectual nexus with single clients. The staff should possess some of the direction accomplishments for it ‘s the key for the house ‘s success.A A It requires certain accomplishments to transport out the variousA maps of managementA and that lead to a coveted public presentation degree. The public presentation achieves through the direction is made up of two of import dimensions: the effectivity and the efficiency of the direction. Aside from holding a low involvement for the pawned belongings, clients want to be treated well.A A Peoples who live in and work in the community where a house is located or making concern are frequently target ofA public dealingss attempt.

Building trust and maintaining cost near to zero ( low involvement ) was the most of import factors in the success of the concern.

Management Skills

Technical skillsA – accomplishments that reflect both an apprehension of and a proficiency in a specialised field.A A For illustration, a director may hold proficient accomplishments in accounting, finance, and technology.

Human skillsA – accomplishments associated with a director ‘s ability to work good with others, both as member of the group and as a leader who gets things through others.A A Directors with effectual human accomplishments are typically expert at pass oning with others and actuating them to develop themselves and execute good in chase of organisational ends.

A Conceptual skillsA – accomplishments related to the ability to visualise the organisation as a whole, discern interrelatednesss among organisational portion, and understand how the organisation fits into the wider context of the industry, community, and world.A A Conceptual accomplishments, coupled with proficient accomplishments, human accomplishments, and aA knowledge base, are of import ingredients inA organisational performance.A

To hold and effectual and efficient staff, it takes a combination of instruction and experience about the field or country ‘s it`s traveling to run or manage.A A Harmonizing to several informal studies, managerial work in the hereafter is peculiarly likely to be affected by an increasing demand to pull off alteration and invention, the turning diverseness of the work force, the burgeoning globalisation of concern, and the spread outing concern with issues of quality andA uninterrupted betterment.

The Research Paradigm

The illustration below contains the undermentioned boxes: input, procedure, and end product which represent the research worker ‘s perceptual experience on the research ‘s model. The input box contains proprietor ‘s parts which are their direction and selling schemes. General grounds why the clients patronize pawnbroker’s shops are besides featured on the input box.

Procedure discloses the SWOT analysis ( Strength, Weakness, Opportunities, and Threats ) of pawn store concern. Each point lists 5 points. Output, as the word really means, is the end-product which resulted from the input and end product. It provides the positive consequences which can be acquired through extended and intensive considerations or careful analysis of the concern


SWOT analysis of Pawnshop Business


Accessible location

Low involvement rate

Procedure is fast and dependable

Longer adulthood period compared to others

Highest grade of assessment


The jurisprudence limits the involvement rate

Some do non hold jewelleries or any point to soak

Many people ca n’t pay their debts

Equipments that are non calibrated

If non incorporated, you assume all the liabilities of the concern


Affiliations or constitution of important influence over other pawn stores ( Incorporation )

Business extension ( money order, etc. )

Acquisition of collateral costs cheaply

Branching of concern

Acquired collateral can be bargained


Abundance of independent pawn agents

Prone to Robbery

Fraud among employees

Fast rate of depreciation of points pawned

Widespread handiness of recognition cards which can supply loans without soaking any point

End product

A successful pawn store concern:

Accessible location- conspicuous or located in a commercial topographic point

Low involvement rate- adoption of money costs cheap compared to other pawn store

Procedure is fast and reliable- minutess are done practicably

Longer adulthood of period compared to others- extended due day of the month

Highest grade of appraisal- more hard currency for client

Input signal

Owner ‘s part:

1. Selling schemes

Low involvement rate

Long adulthood day of the month

2. Management schemes

Skilled pawn agents

Knowing directors

Consumer ‘s ground why they patronize pawn store:

For immediate hard currency

To roll up financess

To sell jewelleries or change over non-cash plus into hard currency

The Research Paradigm

Significance of the Study

The research paper would be a great aid for those who wants to set up a little endeavor such as pawnbroker’s shops, for those who seek for the services of pawnbroker’s shops, and for pawnbroker’s shop proprietors.

For pawnbroker’s shop proprietors:

The research paper is important to be able to understand good the demand and supply analysis for each month of the twelvemonth, the different involvement rates that pawnshops apply and the selling attempts they utilize.

The demand and supply analysis will assist them see the shifting of consumer demand and to be able to assist proprietors to be ready for it. If supply and demand is the ground for jewellery ‘s assessment, there must be a alteration in supply, demand, or something that affects the supply/demand curves in order for the monetary value to alter.

The different involvement rates applied will assist them find the efficiency of each rate and what lenders want. This would assist them run into the demands of their clients and increase their gross revenues.

For enterprisers:

The research survey can assist entrepreneurs who wanted to open up their ain pawnbroker’s shops can cognize the ordinances that they could fall under based on your pick of location will hold a major impact on how you choose to make your concern. Maximum finance charges, minimal keeping times, cursed pledge disposal, and many other of import concern prosodies are regulated by these legislative acts and necessitate to be complied with. These restrictions sometimes vary from metropolis to metropolis.

It is of import to understand these restrictions before puting in your pawnbroker’s shop concern is of great importance to entrepreneurs. Many extra merchandises and services to bring forth extra gross watercourses would be required for such an operation to really run productively.

In most countries there are rigorous demands on signifiers to be used when carry oning concern in a pawnbroker’s shop. The strictest demand is in the content necessary on the pawn loan papers, or pawn ticket.

For lenders:

It is of import for lenders to cognize the different legal involvement rates that a pawnbroker’s shop can offer. This manner, they wo n’t be deceived and would understand the different advantages and fire back of lending through pawnbroker’s shops.

Overall, the research survey is of import to be able to assist people that relates or is involve with pawnbroker’s shops. It can assist through the obliteration of ignorance that concerns to the capable affair being discussed.

Scope and Restrictions of the Study

This survey will concentrate on the success factors of pawnbroker’s shops located in Kalentong.Mandaluyong. It will affect 7 pawnbroker’s shops viz. : Papa`s Pawnshop, Villarica Pawnshop, G. Ochoa Realica Pawnshop, All Women Pawnshop, Palawan Pawnshop, M.G. Bismonte Pawnshop and Cebuana Lhuillier. The respondents of the survey will be 7owners, — -employes, — — costumiers. This survey will cover the period from June to October 2010.


Amortization- the gradual riddance of a liability, such as a mortgage, in regular payments over a specified period of clip.

– Writing off an intangible plus investing over the jutting life of the assets.

Appraisal – the pattern of finding the value of belongings.

Appraiser – a practician who has the cognition and expertness necessary to gauge the value of an plus, or the likeliness of an event occurring, and the cost of such an happening. Ideally, an valuator acts independently of the purchasing and merchandising parties in a dealing in order to get atA the just value of an plus without prejudice.

Auction -a procedure of purchasing and selling goods or services by offering them up for command, taking commands, and so selling the point to the highest bidder.

Bid- monetary value – is the highest monetary value that a purchaser is willing to pay for a good.

Broker loan rate- involvement rate at which agents borrow from Bankss to cover the securities places of their clients. The agent loan rate normally hovers a per centum point or so above such short-run involvement rates as the federal financess rate and the exchequer measure rate.

Business license- a legal papers that grants you the right to run a concern in your metropolis. Depending on your concern, there are other licences that may besides be required.

Business loan – a bank loan granted for the usage of a concern

Business program – is a formal statement of a set of concern ends, the grounds why they are believed come-at-able, and the A A A program for making those ends. It may besides incorporate background information about the organisation or squad trying to make those ends.

Cash flow-a step of a company ‘s fiscal wellness. Peers hard currency grosss minus hard currency payments over a given period of clip ; or equivalently, net net income plus sums charged off for depreciation, depletion, and amortisation.

Camera- is a device that records images, either as a still exposure or as moving images known as picture or films.

Cellphone- A nomadic clip allowed for refund, price reduction for hard currency or early payment, and the sum or rate of late payment punishment. Wireless telephone that communicates with a local sender utilizing a short-wave parallel or digital transmittal.

Collateral- is a borrower ‘s pledge of specific belongings to a loaner, to procure refund of a loan.

Collateral agreement- uninterrupted understanding under which a securities broker-dealer borrows from a bank against listed securities to purchase or transport stock list, finance the underwriting of new issues, or carry the border histories of clients. Synonymous with agent ‘s loan.

Credit- refers to money loaned or the ability of an person or company to borrow money. Credit is besides used to intend positive hard currency entries in a bank history. For case, an history may be credited with involvement. Credit is the antonym of debit.

Credit term – Standard or negotiated footings ( offered by a marketer to a purchaser ) that control the monthly and entire recognition sum, upper limit

Diamond – is an allotrope of C, where the C atoms are arranged in a fluctuation of the face-centered three-dimensional crystal construction called a diamond lattice. Diamond is renowned as a stuff with greatest physical qualities, most of which originate from the strong covalent bonding between its atoms.

Discount Retail – is an chance for client to do their dollars travel farther.It helps other merchandisers and community by giving them more discretional financess.

Fiscal planning- is a systematic attack whereby the fiscal contriver helps the client to maximise his bing fiscal resources by using fiscal tools to accomplish his fiscal ends.

Financial planning besides define as the procedure of run intoing your life ends through proper direction of your fundss.

All right jewellery may be defined as jewellery made out of cherished metals such as gold or Ag and set with cherished or semi-precious rocks.

Foreclosure the procedure by which mortgaged belongings enters into the ownership of the mortgage holder without right of salvation by the mortgager, normally for ground of delinquency in mortgage payments.

Foreclosure process a client defaults by non refunding the loan, the collateral becomes the belongings of the pawnbroker’s shop after the loan is delinquent by a specific sum of clip, by and large one to three months.

Gadget is a little technological object ( such as a device or an contraption ) that has a peculiar map, but is frequently thought of as a freshness.

Gold is a chemical component with the symbol Au and an atomic figure of 79. It has been a extremely sought-after cherished metal for mintage, jewellery

Identity papers ( besides called a piece of designation or ID ) is any papers which may be used to verify facets of a individual ‘s personal individuality.

Standard-sized card, it is normally called an individuality card ( IC ) .

Interest -the cost of borrowing money, normally expressed as a per centum per twelvemonth.

Interest rate -the monetary value a borrower pays for the usage of money they borrow from a loaner, for case a little company might borrow capital from a bank to purchase new assets for their concern, and the return a loaner receives for postponing the usage of financess, by imparting it to the borrower.

Jewelry signifies points of personal adornment, such as necklaces, rings, broachs, earrings and watchbands. Jewelry may be made from any stuff, such as gemstones, cherished metals or shells, besides other stuffs, depending on cultural differences and handiness of stuffs

Lending- disposing of money or belongings with the outlook that the same thing ( or an equivalent ) will be returned.

Loan-A An agreement in which a loaner gives money or belongings to a borrower, and the borrower agrees to return the belongings or refund the money, normally along with involvement, at some future point ( s ) in clip.

Loan covenant- is a status in a commercial loan or bond issue that requires the borrower to carry through certain conditions or which forbids the borrower from set abouting certain actions, or which perchance restricts certain activities to fortunes when other conditions are met.

Margin account- securities firm history leting clients to purchase securities with money borrowed from the agent.

Marketing Startegy-written program ( normally a portion of the overall corporate program ) which combines merchandise development, publicity, distribution, and pricing attack, identifies the house ‘s selling ends, and explains how they will be achieved within a declared timeframe. Marketing scheme determines the pick of mark market section, placement, selling mix, and allotment of resources.

A Money- is any object that is by and large accepted as payment for goods and services and refund of debts in a given state or socio-economic context. [ 1 ] [ 2 ] The chief maps of money are distinguished as: a medium of exchange ; a unit of history ; a shop of value ; and, on occasion, a criterion of deferred payment,

Patinum- Latin word which means fabric or vesture.

PawnA -the status of being held as a pledge against the payment of a loan: gems in pawn.

Pawnable Items- Almost any point that has pecuniary value can be pawned. This includes articles of vesture, jewellery, family goods, house wares, motorized vehiclesA andA tools.

Pawnbroker – Any individual engaged in the concern of imparting money on the security of pledged goods and who may besides buy ware for resale from traders and bargainers. A pawnbroker makes loans on personal belongings left as collateral. The belongings can be redeemed when the loan plus involvement is repaid.

Pawnbroking is a baronial profession dating back 1000s of old ages, yet because of its nature is frequently misunderstood by enterprisers who wish to come in the industry

Pawning-you bring in something you ain and give it to the pawnbroker as collateral for a loan.

Pawnshop – the location at which, or premises in which, a pawnbroker on a regular basis conducts concern. This is a vicinity concern supplying critical services to the community.

Pawn or Pawn dealing – A written bailment of personal belongings as security for a debt, redeemable on certain footings within 180 yearss, unless renewed, and with an implied power of sale on default

Pawn off- to dispose or acquire rid of deceivingly.

Pawn ticket- reception for goods pawned.

Pawn/Collateral – a borrower ‘s pledge of specific belongings to a loaner, to procure refund of a loan.

Pledge – An point to be sold to a pawnbroker.

Net income the positive addition from an investing or concern operation after deducting for all disbursals. antonym of loss.

Redeem- To retrieve ownership of by paying a specified amount.

Short-run – relating to or widening over a limited period ; “ short-term planning ” ; “ a short-run rental ” ; “ short-run recognition ”

Silver- a soft white cherished univalent metallic component holding the highest electrical and thermic conduction of any metal ; occurs in argentite and in free signifier ; used in coins and jewellery and tableware and picture taking

Television ( Television ) – is a widely used telecommunication medium for conveying and having traveling images, either monochromatic ( “ black and white ” ) or colour, normally accompanied by sound.

Valuation – the finding of the economic value of an plus or liability.

Wholesale- value of used good, in the instance that pawnbroker’s shop is unable to sell it and they decide to sell it to aA sweeping merchandiser of used good.

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