Understanding Pawnshop, Function, The Role

Pawnshop 

1. Understanding Pawnshop

The legal basis for pawning or pawning business is Government Regulation (PP) Number 10 of 1990 concerning Pawnshop Public Companies. In the PP, pawnshops or pawning businesses are interpreted as activities to guarantee valuables to certain parties, in order to get a certain amount of money equal to the guaranteed goods which will be redeemed in accordance with the agreement between the customer and the pawning institution.

Pawning business activities, among others include:

  • Provide appraisal services.
  • Provide goods storage services.
  • Provide loans with collateral.
  • Types of Pawnshops, How to Borrow Money at Pawnshops

As for pawnshops according to the Civil Code Article 1150 it is stated that a pawn is a right obtained by a person who owes debt to a movable property, which is handed over to him by a person who has debt or by another person on his behalf, and which gives power to the person who is in debt. the debtor to take payment of the goods is prioritized over other debtors, with the exception of costs for auctioning the goods and costs that have been incurred to save the goods after the goods are pawned.

Perum Pawnshop is a State-Owned Enterprise whose mission is to help government programs in an effort to improve the welfare of the lower middle class. The mission is carried out with the main activities in the form of disbursing pawn loans and conducting other profitable businesses. 

Understanding Pawnshop, Pawnshop Function, The Role of Pawnshops,


2. Pawnshop Function

The main function of the pawnshop is to provide loans or financing to people who need cash funds with certain valuables as collateral. The amount of funds provided will be adjusted to the estimated value of the valuables guaranteed by the borrower. The main tasks of pawnshops based on the Decree of the Minister of Finance Number 39 of 1971 are as follows:

Fostering the economy of the small people by distributing credit based on the law of pawning to productive farmers, fishermen, small traders, and small industries, laborers/ civil servants with a weak economy and consumptive nature.

Participate in preventing improper lending, bondage, illicit pawnshops and other usury practices.

Distributing credit and other businesses that are beneficial, especially for the government and the community.

Fostering credit patterns so that they are truly targeted and useful and if necessary expand their area of ​​operation.

3. The Role of Pawnshops


The role of the pawnshop can be identified by looking at the purpose of the pawnshop itself, which include the following.

Participate in implementing and supporting the implementation of national development programs in general through the distribution of financing/loans on the basis of the law of pawning.

Prevention of bondage practices, illicit pawnshops, and other unreasonable loans.

The use of interest-free pawning on sharia pawns has a social safety net effect because people who need urgent funds are no longer entangled in interest-free loans/financing.

The benefits of pawnshops include the following.

a. For Customers

Availability of fresh funds with relatively easier and simpler procedures and in a faster time compared to general banking financing/credit. In addition, customers also get the benefit of professionally estimating the value of a movable item. Get a safe and reliable movable storage facility.

b. For Pawnshops

Income derived from capital leases paid by borrowers of funds.

Income derived from fees paid by customers who obtain certain services. 


4. Type of Pawnshop

a. Conventional

Pawnshop Conventional pawnshop is a government institution that provides loan money to customers on the basis of pawn law.

The advantages and disadvantages of conventional pawnshops are as follows.

The advantage of conventional pawnshops, conventional pawnshops, is that this pawnshop already has many branches and has even reached villages.

Besides the advantages, Conventional Pawnshops have disadvantages, namely:

Using the interest system;

Savings service rates are relatively large;

The administrative costs are higher when compared to sharia pawnshops (1% of loan money);

The remaining money from the auction of goods is taken by the company;

Conventional pawnshops also still use a manual recording system.

b. Sharia Pawnshop

In general, a sharia pawnshop is a financial institution or division of a pawnshop form by providing loan money to customers in accordance with Islamic sharia principles.

The advantages and disadvantages of sharia pawnshops are; 

1) The advantages of sharia pawnshops are:

a) Using a profit-sharing system;

b) Using the sharia pawn system with Islamic principles;

c) The cost of saving services is less (0.8% per 10 days from the estimate);

d) Administration fee is relatively small (0.27% of loan money);


2) Lack of sharia pawnshops 


The drawback experienced by sharia pawnshops is that they still use manual recording. 

5. Principles of Pawnshop Business Activities

The principles of pawnshop business activities include conventional principles and sharia principles. Conventional pawnshops are pawnshops that operate according to the interest principle. The sharia pawnshop is a pawnshop which in carrying out its operations adheres to sharia principles. According to Andri Soemitera (2009), basically, sharia pawnshops run with two sharia transaction contracts, namely as follows:

Rahn contract, which is a contract to hold the property of the borrower as collateral for the loan he received. The holding party obtains a guarantee to take back all or part of the debt. With this contract, the pawnshop holds movable goods as collateral or customer debt.

Ijarah contract, which is a contract for the transfer of usufructuary rights to goods and/or services through payment of upali leases, without being followed by the transfer of ownership of the goods themselves. Through this contract, it is possible for the pawnshop to collect rent for the storage of movable goods belonging to customers who have entered into a contract.

6. Pawnshop Products 

According to Kasmir (2001) that the business as well as being a product of the pawnshop is as follows.

a. Appraisal services for certain valuables;

b. Certain valuable goods deposit services;

c. Loans with collateral for certain valuables.

Meanwhile, according to Ktut Silvanita (2009) that pawnshop products include estimation services, deposit services, constructive credit, production credit, and gold savings for Hajj pilgrimage fees (ONH).

Options and terms of loan money at Pawnshop 

As reported on the official Pawnshop  website, here are six types of loans and the terms and conditions of each, along with how to borrow money at Pawnshop .

1. KCA (Fast Secure Credit)

KCA is the most popular type of loan at Pawnshop because it is intended for all groups and can be used for productive or consumptive needs.

As the name suggests, this loan is the right solution for people who want to get a loan easily, quickly and safely.

As a way to borrow money at KCA Pawnshop, you only need to meet the requirements to come to the Pawnshop  office while bringing collateral.

This guarantee or collateral can be in the form of gold jewelry, laptops, cellphones, or other valuable electronic goods.

The loan ceiling starts from IDR 50,000 to IDR 500 million. Withdrawal of money can be done in just 15 minutes.

The loan period is a maximum of four months and can be extended by paying a capital rental fee, starting from 0.75% per 15 days.

KCA Terms from Pawnshop

A photocopy of a valid identity card such as an ID card, driver's license, or passport.

Submit collateral. If you want to guarantee a motorized vehicle then you are required to bring the BPKB and also the original STNK.

The customer signs the Proof of Credit (SBK).

2. Krasida (Pawn Loans Installment System)

Sometimes you need a lot of money, such as college entrance fees, home renovations, or wedding expenses.

Well, often many people are confused about how to get a large loan.

Now you don't have to worry because Pawnshop has facilities to meet your needs, namely Krasida or Pawn Loans with the Installment System.

Terms of Krasida from Pawnshop 

  • Identity cards such as ID cards.
  • Family card.
  • Submit collateral or guarantees such as gold or motorized vehicles complete with STNK, BPKB, and purchase invoices.
  • Advantages of the Krasida type of loan
  • Loans reach 95 percent of the estimated installment value.
  • Loan period ranging from 6, 12, 24 to 36 months.
  • Fixed monthly installments.
  • Payment can be made at any time.
  • Loans start from IDR 1 million to IDR 250 million.

3. Creation

Kreasi is a type of loan from Pawnshop which is specifically intended to develop small and medium enterprises (SMEs), called Kreasi.

Kreasi provides loans with a fiduciary system. In this system, the only goods that are used as collateral or collateral are motor vehicle documents, such as the original BPKB, photocopy of STNK, and purchase invoice.

So even though BPKB is detained by Pawnshop, you can still use the vehicle in your daily life.

However, to apply for this Creative loan, you must meet the requirements of having a business that is included in the Pawnshop  criteria, one of which is that the business has been running for at least one year.

Terms of Creation from Pawnshop 

  • Identity like ID card.
  • Family card.
  • Marriage certificate for those who are married.
  • Vehicle ownership documents such as original BPKB, STNK, and purchase invoice or Proof of Ownership of Place of Sale (BPHTB).
  • The loan process is fairly easy and fast. You can get a fairly large loan, starting from Rp. 1 million to Rp. 200 million.

Those are the three types of loans that you can get as well as the conditions from the Pawnshop.

For more information on how to borrow money at Pawnshop, please visit the branch office directly or contact the call center at 1500569.

4. Pawn Securities

Pawning securities is a cash loan service from Pawnshop with a tenor of up to 90 days and loan offers from IDR 5 million to a maximum of IDR 20 billion.

This cash loan product with collateral must guarantee scriptless shares or bonds that are officially traded on the Indonesia Stock Exchange (IDX).

  • The application is as easy as it can be done online through the Digital Pawnshop.
  • Conditions for submitting Pawn Securities at Pawnshop.
  • The following are the requirements for individual submissions.
  • Have an ID card/passport, NPWP, SID (Single Investor Identification).
  • Have shares and/or bonds as collateral.
  • Have a bank account and mobile number.
  • Fill out the official application form at the Pawnshop.
  • The following are the requirements for submitting an agency or company.

Individual ID card/passport representing the corporation or designated in the AD/ART.

AD/ART and recent amendments.

Have a Securities Account (Account Statement).

Have an Institutional SID.

Deed of Establishment and latest financial statements.

Fill out the application form.


5. Rahn (Sharia Gold Pawn)

Rahn or Sharia Gold Pawn is a sharia-based cash loan product for all levels of society.

Not limited to productive purposes, Pawnshop frees customers who want to fulfill their consumptive needs as well.

The application process is fairly easy and the approval process is as fast as 15 minutes. The loan ceiling is IDR 50,000 to more than IDR 1 billion.

The repayment period is between 1-120 days and can be extended by paying a maintenance fee of 0.47% to 0.73% per 10 days.

Sharia Gold Pawn Terms and Conditions at Pawnshop.

To be able to get a cash loan from this Sharia Gold Pawn product, you must meet the following requirements.

Photocopy of ID card or other official identity card.

Provide collateral to Pawnshop in the form of gold jewelry, pure gold bars, diamonds, or other valuables.

Provide the original BPKB if you want to provide a guarantee in the form of a car or motorcycle.

Finally, you as a customer need to sign a Rahn Proof or SBR as proof of agreement.


6. Arrum (Sharia Business Loans)

If you are in need of a cash loan to expand your business, then the solution is Arrum from Pawnshop.

Arrum is a sharia-based cash loan product with a fiduciary system. So, you can pay off your loan every month.

Loan ceilings that can be obtained range from Rp. 1 million to Rp. 400 million.

The loan repayment period can be chosen by the customer, namely 12, 18, 24, or 36 months.

Arrum loan application requirements

Attach a photocopy of your KTP, Family Card, and/or Marriage Certificate. But still must show the original version as well.

Provide guarantees in the form of original BPKB, photocopy of STNK, and invoice for the purchase of the vehicle concerned.

As the main requirement, you are able to provide a reference for the business you want to develop and it has been running for at least one year.

The business must also be proven to be feasible to be developed, halal/legal according to the Shari'a, and legal in the eyes of state law.

Maybe you are curious about how much your monthly installment will be if you have to pay off a number of loans. Try to find out here.

Tips from Lifepal! The loan process at Pawnshop is not difficult. The conditions are easy and it also doesn't take long for the disbursement.

But you have to keep in mind, there is a risk that the goods that are guaranteed will not be returned. Therefore, you should apply for a loan according to your ability to pay it.

Take advantage of insurance as your financial solution

Financial crisis is a risk that we always face, regardless of profession or occupation.

Sometimes, this crisis arises from ourselves or the impact of the actions of others.

There are many examples of disasters that can make us experience a sudden financial crisis, for example:

He was seriously ill, so he had to go to the hospital for treatment. The bill turned out to be expensive and ended up draining savings.

Had a traffic accident so had to rest a few months. There is no income for the family.

The shop, which had been the mainstay of daily income, was sold out because it was hit by a fire from the building next door.

These kinds of risks make us have to spend a lot of money in a short time and finally have to go into debt.

But you don't need to worry if you are already an insurance customer. Thanks to insurance, we are guaranteed from the burden of excessive spending.

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