Hardat ‘Ravi’ Muniram is a 37-year-old, 18-year veteran of the jewellery industry who, two weeks ago, took a giant step in the direction of expanding his enterprise. After 16 years of running his business from a dilapidated, rented building situated at 1 D’Urban Street, Werk-en-Rust, Ravi, as he is known, moved his operations to his own multi-million-dollar three-storey premises immediately adjacent to where he had worked for almost half of his life.
It is a dramatic transformation. A lighted sign outside the building announces the new Elegance Pawnshop and the building itself is decorated with streamers, placed there to celebrate the arrival of the establishment in ‘the big league’ of the pawnshop industry. From the streets one can see half a dozen or so kiosks on the ground floor of the building and while Stabroek Business interviewed Ravi a steady stream of visitors entered the building, were directed to the kiosks, pledged their jewellery for a consideration and left.
Pressing into service a phrase from the pawnshop’s persistent television advertisement, “We offer the highest rates and the longest payback period,” Ravi says Elegance offers up to 80% of the value of the item compared to around 60% in other cases.
But Stabroek Business was less interested in Ravi’s rates and more interested in the changing culture of the pawnshop industry. Ravi is a jeweller by profession and a relative newcomer to a tradition that has transformed itself from what it was half a century or less ago, when people needing cash pledged their gold valuables to acquire the necessary liquidity then reclaimed them after a short period. Indeed, a point was reached where, in many cases, items of gold served much more as a store of value than as pieces of decorative jewellery.
Today, the fundamentals remain the same though the practice has grown manifold. Small pieces of jewellery for modest considerations are still very much the bread and butter of the industry. The ‘regulars’ take their transactions seriously. They insist on a fair deal for their valuables and, in most cases, repay within the prescribed period. “These are good people,” Ravi says. “When they have problems you have to flex with them.”
These days there is a ‘major league’ in the pawnshop industry and persons can pledge and redeem a far greater range of valuables. Elegance Jewellery and Pawnshop handles bigger items, such as houses and cars. The process, though, is far more complex. If, for example, someone wanted to pawn a vehicle or property with Elegance, issues of ownership, accurate registration and mortgage status must be established with the relevant state agencies and with commercial banks, Valuations must be done and legal papers drawn up. It is a complex business that requires specific licences as well as the infrastructure necessary to hold pledged items. Ravi is the holder of both money lending and pawn shop licenses and manages a bond where pledged vehicles are stored.
Where vehicles and houses are involved, monies are raised through commercial banks and Elegance has a special arrangement with a commercial bank through which it finances expensive pledges. This too can be complex business since the owner of the pawnshop must ensure that his own interest rates are lower than what he charges his customers.
It is the speed of the transactions that make pawnshops worth the while. Ravi explains that when people visit pawnshops it is because they need quick money. “Banks take a much longer time. Even with something as big as a car we can process and pay in a day. It’s because we work quicker than banks with the big items that makes us popular,” he says.
Ravi talks less about the jewellery side of his business. The price of gold has sent the jewellery industry into a tailspin. He makes jewellery to order and these days the number of orders are fewer.
He attributes the popularity of the pawnshop industry to the constant need for short-term cash. “People always need to spend on one thing or another. In most cases it is short term; perhaps a few days. It’s not just poor people; you’d be surprised at the people that come in here. The good thing about having a few pieces of jewellery is that you can always exchange them for some cash when you need the cash and have them back when you can repay.”
A new generation of entrepreneurs has entered the pawnshop industry. Awareness of competition has spawned more aggressive marketing, more media advertising. Ravi talks about changing the image of the pawnshop, about creating a customer-friendly environment. “You have to treat your customers right because they can always go elsewhere,” he says.
There are other challenges associated with the industry too. “A lot of people come to pawnshops without knowing how they work. Some people may even have no idea that they have to pay interest on what they borrow. Things are not always straightforward. Sometimes we have to bend the rules to meet the expectations of customers. To do this kind of
