A lot of poor people have discovered rather late in life that while the bank may not be prepared to help them out with a loan, there are other willing avenues to explore. One avenue that is not to be walked down is that dark and narrow tunnel that leads to the money lender’s office. He is usually set up close to or within low income areas where people are always desperate for money. It is also very difficult for the authorities to trace him in such areas.
Because truth be told, the moneylender is operating illegally, charging interest rates way, way above those set by the state and federal authorities. But who is to complain in such desperate times? And you can almost be certain that there is no legitimate record available to back up a complaint. The harsh lesson in life is to ‘neither a borrower be, nor a lender be’. But what does a poor person do when he really needs that loan and it is valid?
One avenue well worth exploring is that of the legally registered pawn shop. The pawn shop owner is legally allowed to lend people money. The lending period is usually for a short term only. While commercial and retail banks usually require some form of collateral as a form of security, most poor people do not have the ability to measure up to their strict criteria. But thankfully, the collateral that the pawn shop owner requires will not necessarily be as stringent.
Come to think of it, instead of having a shady money lender scourge the community, would it not be better and safer perhaps to have a decent pawn shop operation within the community instead. There may also come a time when a poor household requires new items of necessity to spruce up the home, things like newish kitchen appliances, a living room suite and a bigger bed for the growing child, and you get the picture.
Do note, however, that this short article that points poor people in the direction of the pawn shop avenue, motivating them to explore such a store’s benefits in their favor, in no way wishes to place a final nail in the coffin of the local money lender. Because when you think about it, in trying to run a business of his own, he is probably carrying a lot more risk on his shoulders. It has been usual to require no form of security, operating from an element of trust, which prompted the lender to charge such a high level of interest in the first place.
The money lender may well have less overhead in terms of not requiring much in the way of premises space in order to store goods being held. And yes, what if that poor person has no fixed property to turn in at all. But if he is able to prove that he is gainfully employed, the pawn shop operator may still be able to assist him.