Pawnshops cut interest rates for poor parents

PHUKET: Phuket’s three government pawnshops have reduced interest rates on loans until August 15 to help poor parents raise money for school fees. Phuket City Municipality Pawnshop Manager Phuwadon Chinnupathum told the Gazette that the Department of Local Administration in Bangkok ordered the reductions, which came into effect on April 1 and will continue until August 15. During that time, all loans of 3,000 baht or more will incur 1% interest a month on the amount borrowed. Before the interest cuts were ordered, loans of 3,000 baht or more were charged 2% interest on the first 2,000 baht plus 1.25% on each additional 2,000 baht. Interest on loans of less than 500 baht will remain at 0.75% monthly, while loans of 500 baht to 3,000 baht will continue to be charged 1% interest a month. K. Phuwadon explained, “There are a lot of fixed-income families who see their expenses go up during this period because they have to pay for school books, uniforms and admission fees. “We usually have about 100 customers a day, but at the beginning of the new academic year it reaches as high as 400,” he added. K. Phuwadon said that despite competition from new government pawnshops in Patong and Cherng Talay, the Phuket City shop still had the largest number of clients and made 10.9 million baht in profit last year. Adul Lumrassami, Manager of the Cherng Talay Municipality Pawnshop, told the Gazette that its average of 30 clients a day had increased by 70-80% as this academic year began earlier this month. Business is also booming at Patong Municipal Pawnshop, where Manager Chalerm Koompani said that the number of clients had increased by about 25% on last year. Foreigners, who make up about 10% of the Patong shop’s client base, are welcome to pawn goods as long as they present a passport, he said.