Logo of Phnom Penh Post newspaper Phnom Penh Post - Government vows to tighten control over Kingdom’s pawnbrokers

Government vows to tighten control over Kingdom’s pawnbrokers

Customers conduct business at a pawnshop yesterday in Phnom Penh.
Customers conduct business at a pawnshop yesterday in Phnom Penh. Pha Lina

Government vows to tighten control over Kingdom’s pawnbrokers

The government is preparing legislation aimed at ensuring tighter control over the nation’s pawnshops to ensure professionalism in a sector that has grown rapidly and lacks a supervisory framework.

Mey Vann, director of the Department of Industry and Finance at the Ministry of Economy and Finance (MEF), said at the release of the government’s 10-year financial sector development strategy last week that there has been a proliferation of pawnshops in recent years and it was now time to establish clearer laws to regulate the sector.

“Despite the sector developing rapidly, we have seen challenges emerge because we don’t yet have a law to manage the industry,” he said.

Vann could not provide details on the regulations under consideration, nor a timeline for when the legislation would be finalised. However, he announced that the government would increase data collection to monitor and analyse the activities of pawnshops nationwide.

“The MEF will establish an information and communication technology system that will collect data and information needed to regulate pawnshops and provide an early warning system [for the regulator],” he said.

The government first issued regulations in 2010 that allowed pawnshops to operate as licensed businesses, granting them the authority to buy and sell goods as well as use land and property titles for collateral. In late 2016, the MEF issued a warning that all pawnshops needed to conform to the existing licensing procedures.

According to the financial sector development strategy for 2016 to 2025, since 2010 to the middle of last year, a total of 328 licensed pawnshops loaned a combined $37 million to customers.

Kuch Setha, director-general of Cash-U-Up Pawnshop, which has 12 branches across the Cambodia, said he welcomes further regulation of the industry to ensure the sector maintains a positive reputation.

He urged the government to strengthen its ability to inspect pawnshop operations and follow through with doling out penalties for those businesses that accept land titles as collateral or take personal property, such as cars or motorbikes, without having adequate legal documents to demonstrate ownership.

“I fully support any initiative that strictly regulates the sector,” he said. “There are suspicions in the industry that there are an increasing number of pawnshops that will just accept and take valuable goods that could be stolen or have come from a robbery.

Setha said that Cash-U-Up Pawnshop runs its services professionally, charges reasonable interest rates and requires clients to provide documentation that verifies that they are indeed the legal owners of personal property.

“We are committed to operating responsibly because we want people to know that our pawnshop is a place where they can access funds immediately if they are having financial difficulties,” he said.

Lim Heng, vice-president of the Cambodia Chamber of Commerce, said pawnshops can be viewed as a beneficial business for consumers as long as they are regulated. He added that the sooner the MEF finalises regulations, the better.

“A pawnshop is a good place to get short-term funds,” he said. “However, the law must regulate pawnshops not only to stop businesses from accepting stolen property, but also to stop them from charging overly high interest rates.”

MOST VIEWED

  • All inbound flights set to face added scrutiny

    Ministry of Health spokesperson Or Vandine said on Monday that the ministry is monitoring all inbound flights, after it was announced that only those from Malaysia and Indonesia will be temporarily cancelled from August 1. Vandine said on Monday that the two countries were identified as

  • Flights from Indonesia, Malaysia cancelled

    A Ministry of Health official has warned of the possibility of Covid-19 spreading through community transmission after the total infected cases in the Kingdom rose to 225. Ministry spokeswoman Or Vandine told reporters on Saturday that the possibility of community transmission cannot be overlooked and that

  • Man in quarantine dies of ‘overdose’

    The Ministry of Health on Thursday said a Cambodian migrant worker who died while being isolated at a quarantine centre in Tbong Khmum province’s Kroch Chhmar district may have died from syncope or overdose of tablets. In a statement, the ministry said the 21-year-old

  • Ministry set to reopen 20 schools in August

    The Ministry of Education, Youth and Sport will allow 20 high-safety-standards schools to reopen next month despite new cases of Covid-19 in the country. Ministry spokesperson Ros Soveacha wrote in a Telegram message on Wednesday that the schools are in Phnom Penh, Siem Reap and Battambang.