Appraisers at the Nacional Monte de Piedad (National Pawnshop) have been busier than ever this year, according to Javier de la Calle, the non-profit institution’s general director.
Pawning has always been part of Mexico’s financial culture but loans in 2013 will reach a record high due to the current economic stagnation, he said.
Around 9.5 million people are expected to pawn an item at one of Monte de Piedad’s 310 branches this year, he said. At least 700,000 will be first-time customers.Talking at a press conference this week, De la Calle said the national pawnshop generally sees a spike in customers in the period leading up to the new academic year as parents scramble to get their children ready for school.
De la Calle said even the recent drop in the value of gold has not dissuaded Mexicans from pawning goods. Nearly 85 percent of the merchandize brought in is jewelry, with a large proportion containing gold.
Earlier this year Monte de Piedad reduced its monthly interest rate to three percent, making it the cheapest borrower in this market segment. The average loan is 2,450 pesos.
Eight out of ten items pawned are recuperated by their owners, de la Calle said.