Your money, your livelihood
There has been diversification of goods sold to private pawnshops and a trend toward specialization among shops, with some dealing only in designer goods, others only in cars, and so on. In Taipei City, for instance, because interest on cars is high and risk is low, they have become the dominant line of business, with only about 10% of pawnshops still being run along traditional lines.
Huang Yi-hsiu, on the other hand, specializes in the tricky area of large vehicles, ships, yachts, and other oversized collateral. Walking into his pawnshop in the Wanhua District of Taipei, you find only a few square meters of space and a small window for transactions. It's hard to imagine that behind this facade is a very serious business, and when Huang enumerates the collateral he has stored away, it's breathtaking.
A few months ago, Huang accepted a gravel-transport ship worth more than NT$1 billion from a businessman in Kaohsiung, lending out NT$40 million at one shot. Fortunately the ship was redeemed within a month, allowing Huang to get that weight off his shoulders.
He also gets a lot of fishing boats. Early last year petroleum prices rose sharply, and then came the financial storm, causing many fishermen to conclude that it simply wasn't worth leaving the harbor, and that it would be easier just to hock their craft for some ready cash to get through the hard times. However, these boat owners still have to come up with money to pay the monthly interest, which means they have to be able to at least sometimes go out to catch fish (or buy fish from other fishing boats at sea). In some cases, depending on the specific circumstances, Huang has allowed owners of deep-sea fishing boats to take their collateral out to sea. The biggest risk is that the owner won't be able to afford to hire any crew, nor will he be able to sell the ship for a profit, leaving it to rot without paying interest or redeeming the ship, thereby making it the property of the pawnbroker. "I've got 20 fishing vessels in my warehouse right now-what a headache!"
Where the collateral is also essential to a person's job or daily life, there is often no choice but to relax the rules and let the client take home both the money and the object, so that he or she can continue to earn money to pay the interest. This is especially true for taxis.
Huang says, picturing the taxi-jammed streets of Taipei, "six out of ten are being driven around on borrowed money." It is possible to borrow NT$20-50,000 per vehicle, and if the client is known to the dealer or is presentable and trustworthy, or if the borrowed amount is not too high, then the client can drive off with the car and the money. This has become a distinctive feature of recent times. Fortunately, so far there have been few cases of people who run off without paying the interest or without turning over the vehicle at the appointed time.
In the wake of the financial tsunami, rich people also are turning to pawnshops. To save clients the embarrassment of being recognized, some dealers now offer "drive-thru" service to satisfy their clients' demand for privacy.