In Hard Times, Pawnshops Thrive

By Aung Thet Wine/ Rangoon
[Source - Irrawaddy]

A 13-year-old student wearing a school blouse and a faded green longyi shyly approached the owner of the Yadana Pawnshop on Moe Kaung Street in eastern Dagon Myothit.

Pale and very thin, the girl slowly removed a packet from her ragged school bag and handed it to the woman pawnbroker, who unfolded a tattered, faded, longyi. She inspected it carefully, before speaking.

"300 kyat [0.40 cents]," she said. The girl’s eyes turned sad.

"Aunty, please give me 500 kyat,” she said. “Today I have to pay school fees."

The pawnbroker looked at the girl and then silently began folding the longyi. Finished, she carefully wrote out a receipt.

Through a small window, she handed the student 500 kyat and a crisp, white receipt.

The girl smiled. She put the kyat and receipt into her school bag and walked outside into the rain. She could remain in school for one more term.

The men and women waiting in the pawnshop had watched the exchange with sympathy. They were also customers with hopes of getting a few kyat to meet their immediate needs. Some needed bus fare to get to work; some needed money for rice; some needed medicine.

Many people in Burma go to pawnbrokers each day now carrying clothes or cooking utensils to pawn for enough money to get through the day. They are mostly day laborers who are paid small salaries at each day’s end. Some would return that evening to buy back whatever they pawned in the morning, only to return in a few days’ time to pawn the object again.

"After Cyclone Nargis, the most pawned items are clothes and cooking utensils,” said a pawnshop owner in Hlaing Tharyar Township. “Mostly women’s longyi and cooking pots. Most people who pawn things are daily wage earners with low living standards or civil servants in low ranks." "

“Every morning, I have to find money for bus fares," a mason from Ward 21 in Hlaing Tharyar Township told The Irrawaddy. He was working regularly at a construction site in downtown Rangoon and had to commute to work.

A pawnbroker with a shop near Insein Market, said: "When the houses collapsed in the cyclone and a lot of people lost their jobs, they turned to the pawnshops. I had roughly 60 to 100 customers before, but now about 200 to 300 people come regularly.”

A civil servant at the Defense Textile Mill said, "Twelve days after I’m paid the money runs out, and then I have to run to the pawnshop for daily food.”

Pawnshops are among the most successful businesses in Rangoon, according to an official at the Yangon Municipal Committee. He said Rangoon had 137 registered pawnshops in 2000-2001; 169 in 2001-2002; 162 from 2002-2004; 189 in 2004-2005; 214 in 2005-2006; 250 in 2006-2007; and 256 pawnshops in 2008.

A pawnshop owner must bid for a registration license. Owners say the winners are those who pay the largest bribes.

"The license fee is 5 million kyat [about US $4,237] and the bribe is 2 million kyat [$1,695], so totally it costs about 7 million kyat [$5,929] for a license," said a pawnbroker in Hlaing Tharyar Township.

The license fee varies in each township, rising to around 8 million kyat [$6,776] for a downtown township location, according to owners.

Pawnshop owners say you need about 200 million kyat [$169,500] to start a top-line pawnshop, which essentially functions as a small loan business. Many unlicensed pawnshops are springing up, they say, drawing many regular customers away from registered pawnshops.

But for now—with the Burmese economy reeling from the cyclone’s impact and more people out of work—pawnshops everywhere are thriving with customers trying to get through one more day in a life of unrelieved hardship.