The Bangko Sentral ng Pilipinas (BSP) has come out with a new supervisory framework for pawnshops that allows for faster registration.
This was embodied in Circular No. 938 issued by BSP Governor Amando M. Tetangco Jr. last year.
In a statement, the BSP said the circular facilitated the adoption of a “network-based approach” that would also introduce different types of licenses depending on the type and/or level of complexity of the business, each of which would then mandate a specific minimum amount of capital.
“There are a number of measures that have been approved to make the registration of pawnshops easy. And if you are operating a network of pawnshops, you don’t need prior approval for each and every office—for as long as you have the basic license, you can put up offices without getting approval from the Bangko Sentral [but] you only have to inform the BSP,” Tetangco told reporters last month.
BSP data showed that as of June 2016, there were over 16,200 BSP-authorized pawnshops, of which 6,700 were also functioning as forex dealers, money changers or remittance agents.
The BSP said the new rules would likewise require pawnshop operators to disclose to their customers the following: The effective interest rate of loans, including the charges on the transaction; as well as the policy on insurance of pawned items, maturity date and grade period in cases the customer failed to redeem the loan.
The new framework also limits to 19 the maximum number of creditors from which pawnshops may borrow to finance their pawning operations, the BSP said, although the limit “does not cover borrowings for purposes of acquiring fixed assets intended for business operations.”
According to the BSP, these new rules on pawnshops would foster financial inclusion while protecting consumers. —BEN O. DE VERA