Pawn business booming in Sweden as economy suffers
AFP/The Local · 30 Jan 2009, 17:50
Published: 30 Jan 2009 17:50 GMT+01:00
"We had a big increase in the number of people coming to pawn shops. About 250,000 came last year," out of a population of more than nine million, Peter Sundström, who heads up Pantbanken Sverige, told AFP.
He said the number of loans offered against collateral in his company's pawn shops across Sweden had jumped 20 percent compared to a year earlier.
The total amount of the loans, some 1.4 billion kronor ($170 million), had jumped 40 percent.
"I haven't seen this kind of increase ever before," he said, stressing that the hike was even steeper than during Sweden's dire economic crisis in the 1990s.
An increasing number of women, most of them in their forties, were coming in to pawn their jewelry, paintings and other valuables in an effort to "take care of their household finances," Sundström said.
Jewelry makes up about 80 percent of the items left in Pantbanken's shops.
Sundström said the soaring price for gold, which on Friday was selling for $918 an ounce, could help explain the growing pawn business.
"Everything is decreasing in value except gold," he said.
Around 90 percent of all the loans, which on average were for 3,500 kronor, were in the end repaid and the borrowers were able to get their valuables back, he said.
Sweden, which officially slipped into recession in the third quarter last year, is expected to see its economy shrink 0.8 percent this year, according to government forecasts.
That would mark the traditionally prosperous Scandinavian country's worst recession in 30 years.
The country's economy is expected to bounce back some in 2010, according to the government, which predicts that gross domestic product will grow 1.5 percent next year.