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Page last updated at 06:46 GMT, Thursday, 10 July 2008 07:46 UK
Pawnbrokers report profit rises
By Matt Cole
Newsbeat reporter, Edmonton

The credit crunch is hurting people across Britain, but not - it seems - pawnbrokers. For their industry it's providing a welcome boost to business as people unable to get credit cards and bank loans find other ways of making ends meet.

Pawnbroker
Many people are finding they need to pawn jewellery in order to pay the bills

On Edmonton's busy high street, lots of shops are offering quick ways to get hold of money.

Brightly coloured posters in reds, blues and shocking yellow offer "speedy loans 300 to 600" or "immediate cash loans".

It appears they are catching the eye of many by-passers.

Hanging above Albemarle and Bond's window are three golden balls - the historic symbol of a pawnbrokers.

Inside Julienne is getting a quick loan - leaving a golden bracelet as security.

She explained: "If I know I'm short on cash, I don't want to use my overdraft.

"I don't want the bank to charge me 38 pounds every month. So I bring my jewellery in instead."

Pawnbroker window
Some people find pawn shops a short-term cash solution

Normally she raises about 100 or 200 a month which she pays back on pay day, along with whatever interest she owes.

She went on: "It helps with my gas bill, it helps with my rent, with my food. Sometimes I haven't got a bus pass to get to work so I need to do it (pawn jewellery)."

Short term loans

Pawnbrokers offer instant loans and hold onto something you own - usually watches or jewellery - as security in case you can't repay it.

Normally the loan period is up to six months, after which you either pay back what you owe, or your jewellery is auctioned and you're reimbursed anything left over after your debt is cleared.

Annual interest rates are high - perhaps 100 per cent.

However the extra cash you pay back is often quite low because loan periods are short.

For a person borrowing 100 until the end of the month, the repayment is likely to be something like 108. That's cheaper than a lot of overdraft fees.

In the current credit crunch climate it seems many people are finding this an attractive way to get small amounts of credit.

The National Pawnbrokers Association has surveyed more than 500 of its member stores across the UK and learned that in the last six months, 94 per cent reported increased business.

Ninety seven per cent said they expected it would go up in the next six months.

Credit crunch

Tony Lambert is the area manger for Albemarle and Bond and looks after ten stores.

Tony Lambert
Tony Lambert has seen a rise in customers at his 10 stores

He said: "The average company loan is just 100. We've probably seen a growth in pawn broking of around about 30 per cent across the board in all of our shops.

"People are being forced into it by the credit crunch. People are finding it harder to obtain money from the banks.

"We just provide a quick easy way for people to obtain cash with no effect to their credit rating if they fail to collect their goods.

"The vast majority of people do collect their property, about 80 per cent."

Suited and booted

Behind the thick glass counter of Albemarle and Bond's Edmonton branch, its manger Laura Harlow explained that recently she's started seeing a new breed of client.

She said: "Yeah, customers do now come in suited and booted."

"Why honestly would they need money?" she asked, before suggesting: "I guess they need the money. Everyone's in the same predicament now."

She added that a lot of people just need money to pay their bills.

One of those people in Bridgit. She's used pawnbrokers for years but is now having to visit more often than she'd like.

She said: "I used to only pawn low. But I started to pawn for 400 or 500 to clear my bills off.

"I don't want to lose my home so I'm going to take my jewellery off and hand it over.

"I have to have a roof over my head for the children. They come first."

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