Pawnbrokers Report Rising Profits
With over 850 outlets in the UK compared to only 50 in 1970 and two of the major pawn brokerages reporting record profits, the pawn broker industry has never looked so profitable with an annual turnover of over £450 million, an increase of over 300% compared to ten years ago.
The UK's largest pawnbroker chain (with 85 shops), Albemarle & Bond reported record profits of nearly £7 million last year. They focus only on the loan of money secured on gold. CASH Converters International (managers of the cash converters pawn brokers) reported a profit of over £90,000 in the last six months in their UK business.
Why are they so profitable? Well imagine you own a piece of jewellery. A pawnbroker would give you a low valuation (typically two thirds of it's second hand resale value) let's say £180. Each month, you will have to pay £12.51 in interest, and if you don't buy back the ring after six months, it is sold to reclaim the debt. Over six months, that works out to be an APR of 41.7%.
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