Association hoping govt will help by postponing issuance of new pawnbroker licences, especially to foreign investors

by NUR HANANI AZMAN / pic by BLOOMBERG

PAWN shops saw their businesses down by 10% while newly launched businesses recorded a loss as the Movement Control Order (MCO) 3.0 limited operating hours and more people redeem their valuables on various government aids.

Malaysia Pawnbrokers Association president Tan Ho Keng told The Malaysian Reserve (TMR) that people are spending less and saving more compared to the previous lockdowns.

“Whatever the reason — at this point, the number of people who redeem their items is higher compared to those who pawn their items. However, the impact on MCO 3.0 is not that bad compared to MC0 1.0,” he said.

Tan said some of its members complained that they had been issued a compound due to confusing standard operating procedures.

“According to the National Security Council, pawnshops are essential and allowed to open. But some of our members in different states have been fined for operating,” he added.

The association, which has close to 500 federal and state members, is hoping the government will help the industry tide over challenging times by postponing the issuance of new pawnbroker licences, especially to foreign investors.

“The market is small and now becomes saturated. With many foreign investors such as Singapore opening a big chain of pawn shops, how do we survive?

“Considering difficulties we are facing, we also hope the government will allow the commercial bank to offer loans to pawn shop owners,” he said.

Meanwhile, the Federation of Goldsmiths and Jewellers Associations of Malaysia (FGJAM) expressed their sadness for not being allowed to operate during MCO 3.0.

Its president Datuk Steven Siow expressed his hope for the current MCO to not be prolonged as it will collapse businesses.

“If this MCO is extended, gold and jewellery shops will be in trouble. We are already facing a big problem now due to the fluctuation of the gold price.

“Not many of us are selling gold and jewellery online due to high risk, meaning the majority of the retailers recorded no sales at all this month,” he told TMR.

Just like other business associations, FGJAM demands the government to facilitate an automatic and blanket bank loan moratorium until Dec 31.

“Even though we are not operating, we still need to pay rental and other costs. Rental fee in a shopping mall at Kuala Lumpur is around RM100,000.

“When there is no sales, it obviously means there is no cashflow,” he added.