Starting Up a Pawnshop

Pawn Shop

Average Capital Requirement: N300,000

Summary:

Pawn shop allows you to trade with money and items at the same time. Depending on the fee you charge (interest rate) you can make up to 10% of your trading amount every week. If your trading amount is N200,000, for instance, you can make up to N80,000/month.

Introduction:

“A pawn shop (also called a pawnshop or pawnbroker) is a shop or business who loans money to people who bring in valuable items which they leave with the pawnbroker. Examples of items that a person may leave are jewellery, gold, watches, cameras, musical instruments, televisions or computers.

The valuables that people leave are called the “collateral”. The person can get their valuable item back from the pawnbroker if they pay back the money they were loaned and pay interest on the loan. Interest is like a fee for getting to use someone else’s money for a set period of time. If the person who has borrowed money from the pawnbroker does not repay the loan and interest within an agreed-upon time limit, the pawnbroker can sell the valuable item to another customer to get back the money they loaned.

To prevent thieves from using pawnshops as a way to get money from stolen goods, many communities have laws requiring that people who bring in valuable items to the pawnshop have to show identification, such as a driver’s license.” – culled from Wikipaedia

Required Resources