BSP: 1M Filipinos got P6.8B in gov’t cash aid through pawnshops in 2020
MANILA, Philippines—Almost one million Filipinos got cash aid from the government in 2020 through a network of pawnshops that is bigger than the combined branches of all of the country’s universal, commercial, thrift and cooperative banks, according to the Bangko Sentral ng Pilipinas (BSP).
BSP Governor Benjamin Diokno cited the role of the pawnbroking industry in promoting financial inclusion among the most underprivileged citizens at the height of the COVID-19 pandemic in 2020.
According to Diokno, more than P6.8 billion in government cash aid for 935,505 beneficiaries was distributed through pawnshops as of end-December 2020, citing reports by banks and electronic money issuers (EMIs) to the BSP.
“With presence in 82 percent of the country’s local government units, pawnshops serve as cash-out agents for banks and EMIs in distributing government financial assistance during the pandemic,” he said at an online press briefing on Wednesday (April 21).
The pawnbroking industry has a footprint in 1,348 cities and municipalities nationwide. At end-December 2020, the number of pawnshop head offices and branches reached 14,641, a 5 percent rise from 2019 figures.
The number of the industry’s offices and branches surpassed the combined 13,044 physical network of universal, commercial, thrift, rural and cooperative banks as of end-December 2020.
Pawnshops provide immediate liquidity to borrowers who have personal assets that can serve as collateral, even to those individuals with no credit history.
The operations of these financial institutions are also evolving, as 83 percent of their offices and branches also performed remittance and money-changing services as of end-December 2020.
“Pawnshops play a key role in inclusive finance because of their extensive network that serves as financial access points for low-income individuals, small businesses and social amelioration beneficiaries,” Diokno said.
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