Informal Source of Credit via Pawnshops solving the problem of Filipinos of Urgent and Upfront Need of Cash: Ken Research


April, 2016, New Delhi

  • The major catalyst for the growth of pawnshops have been the minimal transaction costs on the part of borrower, easy and quick availability of loan and higher accessibility of pawnshops even under the remote areas of the country.

The basic idea behind the pawnshops is to lend money against collateral. The banks also perform the similar function however there are certain fundamental differences between the operations and lending procedure from both source of finances i.e. banks and pawnshops.

It has been observed that the customers generally approach pawnshops when there is urgent and upfront need of cash with the individuals. Moreover, when the customer does not have a strong credit worthiness that disable him to borrow money from formal sources of finance, in that case the customer resort to the pawnshops.

“Lack of credit facilities, lower credit card penetration and incomplete credit histories has prompted the borrowers to resort to the pawnshops since they require just a valid identity proof and collateral to provide the credit, according to the Research Analyst, Ken Research”

Out of the 17,000+ pawnshops in 2015, around 7,000+ pawnshops also provide certain auxiliary services such as remittances facilitation, money changing, and bills payment facilitation. Additionally some pawnshops also serve as “cash in-cash out centers” and provide mobile banking services.

Cebuana Lhuillier is the largest pawnshop in the pawning segment of their business in 2015. The direct competitor of Cebuana Lhuillier is M Lhuillier. The future growth would be lower in terms of the loan disbursed through the pawnshops since banks in the Philippines are also looking forward to expand their reach top the far off places. The advent of online pawning with lower interest rates, longer lending time and greater ease of transactions will completely change the dynamic of pawnshop market in Philippines.

The market research report titled “Philippines Pawnshop Market Outlook to 2020 – Convenient Pawning and Remittance Services to Stimulate Growth” provides insight on the Pawnshops Industry in Philippines covering several aspects related to loan disbursed by Pawnshop industry, volume of domestic remittance transactions and number of pawnshops, in-migrants statistics, segmentation by new and renewed transactions, repayment period and process, services provided, pawned items and by income source and detailed competitive landscape of major pawnshop players in pawning and money transfer segments.

The report is useful for industry consultants and analysts, pawnshop managers and owners and new players venturing in the market.


Key Products Mentioned in the Report


Money Transfer

Bill payments and e-load



Companies Covered in the Report

Cebuana Lhuillier

M Lhuillier

Palawan Pawnshop

RD Pawnshop

Related Reports:

Philippines Domestic and International Money Transfer Industry Outlook to 2019 – Driven by Mobile Money and Increase in OFWs

Malaysia Remittance Industry Outlook to 2019 – Driven By Increasing International and Domestic Migration

The US International, Domestic Money Remittance and Bill Payments Market Outlook to 2018 – Tie-ups and Mobile Remittances to Foster Future Growth

Sales and Marketing
Ankur Gupta, Head Marketing & Communications



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