PETALING JAYA: A review of pawn shop interest rate is vital for the benefit of the people who depend on the service to make ends meet, said Selangor Wilayah Indian News Vendors Association (Swinva) president Datuk N.S. Muneyaandy.
It is especially urgent as the rate has been stagnant for the past 58 years, he added.
Currently, pawn shops are charging from 24% per annum and should be reviewed to suit the current banking and lending rates.
“We’ve decided to come forward as there have been numerous public complaints and we’re highlighting the case to the Government to seek a solution for those who are drowning in debts from pawning their belongings,” Muneyaandy told reporters yesterday.
“Those who turn to pawn shops are those who require urgent financial assistance but are subsequently forced to lose everything when the due is not cleared.”
He proposed that the lending base be increased from one-third to two-thirds of the item’s value. Also proposed was changing the duration of six months to one year.
“If it is an unsecured loan then it is 24% per annum but this is secured loan hence it should come under the purview of Bank Negara according to its guidelines,” Muneyaandy said.
MIC Youth leader T. Mohan, who was present at the press conference, said a memorandum would be sent to the Prime Minister’s Department to look into the issue.
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