The Malaysian Insight

LONG queues were seen today outside pawnshops as customers rushed to pay the delayed interest on their loans and renew their pawn receipts for their valuables which they had put down as collateral.

The pawnbrokers are open for business for the first time since March 18, when the movement control order came into force.

Social media was awash with photos of the queues at the pawn shops. 

Many who spoke to The Malaysian Insight said they were there to pay what they owed in interest.

Danish, 26, said he had hocked an item last year due to financial difficulties.

“I have to pay the interest now or I will lose what I have pawned.”

He said the interest doubled from 1 to 2% if he is late with payment, which is usually six months from the transaction date.

“It’s kind of like a bank loan. You take out a loan and you have six months to pay it back with interest.

“However, if you pay late then the interest goes up.”

Anand Kumar, 30, who stood in line for half an hour, said he was there to pay the interest on the loan secured with his mother’s gold chain.

The pawner has six months to repay the loan plus interest. He can extend the loan period or risk losing the item for good.

At a pawn shop in Kuala Lumpur, the owner took the customers’ temperature and allowed only three people at a time into the shop.

However, the people in the queue outside did not practise social distancing

Malaysia Pawnbrokers Association president Tan Ho Keng said big crowds had gathered at the pawn shops in several states.

“Due to the shops being closed since March 18 and only reopening today, many customers have rushed to pay the interest on their pawned items.

“Some have redeemed their items while others have pawned something in exchange for cash,” he said.

He assured the customers there was no need to worry their pledges being forfeited as the government had asked the industry to give the customers a three-month grace period to repay their loans.

He said pawnbrokers would adhere to government health and safety guidelines to prevent the spread of Covid-19. – May 4, 2020.