By Non-Constituency MP, Yee Jenn Jong
[Delivered in Parliament on 19 Jan 2015]
This Bill seeks to update the Pawnbrokers Act which was last amended in 1993. Amongst others, it removes the existing auction system, requires pawnbrokers to provide an indicative valuation of a pledge to a pawner at the point of pawning and at the end of the redemption period, and raises the minimum paid-up capital of pawnbrokers for their first outlet and for each subsequent branch.
Madam Speaker, I support the Bill. I am concerned though about the rise in the number of pawnshops and in the total value of pawnbroking loans in recent years. The number of pawnshops has grown from 114 in 2008 to 217 as at June 2014. The value of pawnbroking loans rose more than three times from S$2 billion in 2009 to a peak of S$7.1 billion in 2012. Many of the pawnshops are in the HDB heartlands. In an earlier parliament reply, we are told that HDB does not generally limit the number of shops for each trade and leaves it to market forces to determine the trade mix of shops. Market forces have indeed led to the rise of the pawnbroking industry.
In our geographically small island state, with some 217 outlets, access to pawnshops for a quick loan is easy. This has prompted some journalists to cast the spotlight on our pawnbrokering industry which now has three publicly listed pawnbrokers as key players in the market. A Bloomberg report in June last year titled “Rolex for Casino Cash Fuels Singapore Pawnshop Growth” highlighted stories and statements by industry players about the rise in pawnbrokering activities being driven by gambling. The report, as well as other reports, also pointed to soaring living costs as another reason for Singaporeans to turn to easy credit sources such as pawnbrokers to cover their living expenses.
Madam Speaker, there is very little data available on the profile of pawners. The ministry has said that it does not track the reason for non-redemption of pledges. While the overall percentage is small at 5%, 5% of 4 million valuables pawned in 2012 works out to around 200,000 items that were unredeemed and had to be sent for auction. We do not know how many of these 200,000 items were from pawners who repeatedly failed to redeem their valuables. We also do not know the reasons for these non-redemptions.
I’d like to call for a more detailed study on the profile of pawners and on the industry. In particular, we should look at those who do not redeem their valuables to understand the underlying reasons. Also, in order not to become a society with excessive pawning, the study can also look into the appropriate number of outlets in each neighbourhood and if the level and content of advertising should be subjected to some controls. I believe better data will be useful to help look into the underlying causes for the rapid rise in the pawnbrokering trade and how we can tweak the Pawnbrokers Bill in future to continue to keep pace with this industry’s changing landscape.
Thank you.