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April 24, 2024

Pawnshops continues to grow with diversified products, services

The Philippine pawnbroking industry continue to grow in terms of assets, network, and capitalization as it expands the range of products and services it offers to the public.

Outgoing Bangko Sentral ng Pilipinas Governor Benjamin Diokno said the assets of the pawnshop sector inched up by 4.7 percent to P96.9 billion in 2021 from P92.5 billion in 2020.

Diokno said the industry’s network also expanded to 1,156 head offices and 14,350 branches nationwide by end-March 2022, from 1,152 head offices and 14,236 branches three months earlier.

The incoming Finance Secretary said that pawnshops are present in 1,361 of 1,634 cities and municipalities, or 83.3 percent of all local government units across the country.

Likewise, the industry’s capitalization inched up by 2.6 percent to P42.2 billion and remains adequate to support risk-taking activities.

The rise in pawnshops’ capitalization was primarily driven by capital accumulation from continued profitable operations, with earnings of P3.9 billion in 2021.

According to the regulator, the pawnbroking industry sustained its growth amid continuous diversification, innovation, and digitalization.

Aside from extending loans on pledged assets, pawnshops have diversified their products and services to include activities such as remittances, money changing, bills payment, and cash agency.

Pawnshops, particularly the major players, are now multi-product or multi-service institutions, with group structures and multiple financial service access touch points.

“The industry’s multiple financial access points, wide geographical reach, and role of providing accessible loans to households and small entrepreneurs, including the unbanked, all underscore the crucial role of pawnshops in promoting financial inclusion,” Diokno added.

Meanwhile, the BSP continues to pursue responsive and holistic policy initiatives and supervisory approaches for pawnshops to ensure the safety and soundness of the industry and the financial system in general.