With the economy still struggling to regain momentum, payday advance lending and pawnbroking has been increasingly popular as the nation’s hard-pressed seek to make ends meet and keep their heads above water.
In fact, Barry Stevenson, the chief executive of major pawnbroking chain Albermarle & Bond, says that the firm will be opening an additional 25 pawnshops this year alone, and could possibly top 300 stores in operation in the immediate future, as demand for access to short term loans has been rampant. Mr Stevenson added that A&B has plans to make forays into central London, though the region has not been considered to be one that had a considerable need for its services until recently.
A&B’s business has been profitable enough to drive its interim dividend up to 3p, or 9 per cent. In the last six months of 2011, the pawnbroking firm’s profits increased by 12 per cent to just over £12 million, with its pledge book growing by 7 per cent to more than £38 million.
The Dickensian reputation that pawnbroking in the UK has been labouring under is both unfair and outdated. The chief executive argued that A&B has stepped into a void in the economy left by banks that either charge massive fees for unauthorised overdrafts or shunning short term lending.
The lion’s share of lending that the pawnbroking firm agrees to go to individual borrowers, A&B said. However, an increasing number of small business owners have availed themselves of pawnbroking in order to solve short-term issues with cashflow that would ordinarily be resolved by a bank, friends, or family members.