A LAWYER for a mid-sized Cambodian bank has called for the government to put a cap on the amount pawnshops can lend and prevent them from taking property as collateral for loans.
Ros Monin, managing partner at Sewha-Cambodia Law Group, which represents Shinhan Khmer Bank, said that a draft prakas, or edict, on regulating pawnshops could pave the way for them to compete with banks in the lending market if passed in its current form.
“Banks could lose their customers to these pawnbrokers because there are complicated procedures involved in borrowing money from banks,” he said.
“Pawnbrokers have quite quick and simple procedures so customers will not borrow from banks when they need money just for a short time.”
The Ministry of Finance prakas is currently before the private sector for feedback.
Ros Monin called on the government to limit the amount pawnshops can lend to US$100,000 and prevent pawnshops from taking fixed assets such as house and land titles for collateral.
“Some large pawnshops are owned by rich and powerful figures, so they have a lot of money to lend to customers,” he said. “If there are no limits to the maximum loan pawnshops can offer, they will offer large loans.”
Ros Monin, managing partner at Sewha-Cambodia Law Group, which represents Shinhan Khmer Bank, said that a draft prakas, or edict, on regulating pawnshops could pave the way for them to compete with banks in the lending market if passed in its current form.
“Banks could lose their customers to these pawnbrokers because there are complicated procedures involved in borrowing money from banks,” he said.
“Pawnbrokers have quite quick and simple procedures so customers will not borrow from banks when they need money just for a short time.”
The Ministry of Finance prakas is currently before the private sector for feedback.
Ros Monin called on the government to limit the amount pawnshops can lend to US$100,000 and prevent pawnshops from taking fixed assets such as house and land titles for collateral.
“Some large pawnshops are owned by rich and powerful figures, so they have a lot of money to lend to customers,” he said. “If there are no limits to the maximum loan pawnshops can offer, they will offer large loans.”
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