Why Guatemalans Go to Pawn Shops in January

cover need

Jorge López, a resident of zone 18, was one of those who came yesterday in search of cash to cover the school expenses of his three daughters, who will start classes next Monday. Also read: Flow of foreign investment contracted in the third quarter of 2018 He said that he had no other option than to pawn an appliance he acquired in December to complete the list of supplies, which increased this year compared to 2017.

He recalled that, due to the urgency of obtaining the resources, he even left his pledge, since with lenders the interest is too high and other formal businesses take several days to verify if they can be credited. "I had no other option than to leave the garment, and I received Q2,500," he said, after having carried out the operation in a pawn shop located on Paseo de la Sixta Avenida.

High season

Marco Antonio Argueta Miranda, administrator of the Monte de Piedad of the National Mortgage Credit (CHN), explained that January, February and March correspond to a high season, influenced by the start of classes. Another percentage points to people who, because it is New Year, venture to start a business and need capital.

"Movement is low now, but when the school year begins we expect transactions to increase by up to 25%," he said.

The administrator emphasized that the most common thing they receive as collateral are chains, bracelets, watches or other gold objects and, depending on their condition and carats, this will be the appraisal.

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Monte de Piedad's interest rate is 4% per month, which is one of the lowest in the market and has a business reason that customers can get their clothes back, he added. On average, they serve between 300 and 400 clients.

For the moment, she indicated that receiving appliances and other clothing has been suspended while the inventory is liquidated. In 30 days the restriction will be lifted. Also read: Renegotiation with the United Kingdom: The 3 Guatemalan products with the best opportunities A client of the Monte de Piedad who went to the establishment yesterday and who preferred to omit his name, explained that he had financial problems in December, and to settle the payment of school fees he pawned his jewelry .

“I have this option to have cash and within 30 days I recover the garment. The need forces me to resort to the Monte de Piedad at this time, ”she said.

lack of planning

The economist Juan Alberto González Jacobo explained that many people who go to these establishments to obtain funds do not have a financial forecast for what is traditionally known as the January cost.

"In December, motivated by the collective consumption environment and by the greater purchasing power, families tend to make unnecessary expenses," he said.

He referred that another problem is that people start the year with credits and maintain negative balances from the previous one, so they accumulate more debt.

"Education is one of the most important household spending items at the beginning of the year," said González Jacobo.

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