The Malaysian Insight

MITIGATING measures taken by the government to help Malaysians overcome their economic hardship have had dire consequences on pawnbrokers – their business is down by up to 30% since January.

Pawnbrokers told The Malaysian Insight that the first round of movement-control order (MCO) last March resulted in people being caught off-guard and in need of urgent cash, prompting them to find solutions by pawning their valuables.

However, a year on, with various government measures in place to help alleviate people’s financial problems, the queue at pawn shops during the second round of MCO has been insignificant, they said.

Malaysian Pawnbrokers Association president Tan Ho Keng said fewer people were coming to pawn their goods during MCO 2.0. On the contrary, they are redeeming their pawned items, causing the pawn shops’ business to fall.

“During this period, people in our industry have complained as their overall business has declined by 20-30%,” he said.

He said that although the country was still battling the Covid-19 pandemic, the government has introduced a number of measures to ease the people’s burden.

“People can now withdraw their EPF savings and there are various government subsidies.

“And with the extra money, people are also choosing to redeem their valuables left at pawnbrokers.”

He also did not see an increase in the number of people visiting the pawnbrokers closer to the Chinese New Year.

Tan said the Chinese community would not be spending a lot of money for the celebration, as they are unable to go anywhere due to the pandemic.

“Everyone will try to save and will not spend too much money on the new year, so no one will face the problem of poor turnover and unable to celebrate the new year.”

If business remains poor for the pawnbrokers, it will become increasingly difficult for the industry to operate, especially for newly opened pawn shops, he said.

“In the end, it cannot be ruled out that we will see closure of the pawn shops. After all, if the situation continues for too long without any income, it is really difficult to sustain the business.”

Pajak Gadai Bandar Puteri Klang Sdn Bhd’s Bryan Ang Jia Jun, meanwhile, said the pandemic is not the only reason for the industry to be in its sunset years.

Customers are from an aging group, from a time when people were accumulating gold jewellery.

“Older customers knew how to collect gold jewellery but younger ones are not so keen on that. Even if they have any, it is only small pieces of gold items,” said Ang, who owns five shops nationwide, mainly dealing in gold jewellery and luxury watches.

He said the situation for pawnbrokers was more difficult last year when they were prohibited from operating in the early days of the MCO.

“The industry was in trouble then, losing rent, employee salaries and utility bills, but now that it has resumed business, all problems will be solved,” he said.

The nation is under MCO until February 18, which is likely to be extended with the number of Covid-19 cases hitting four digits daily.

Under the MCO 2.0 many sectors are allowed to operate, but with strict health protocols in place. – February 10, 2021.