Tito Summa Siahaan & Nandra Galang Anissa
Although the Idul Fitri holiday is still three weeks away, lines at pawnshops in Greater Jakarta are growing as people flock to sell gold, jewelry, cars, motorbikes and even houses in exchange for cash during the spending heavy month of Ramadan.
Customers head to the pawn shops for a variety of reasons. Some want to get loans for investment purposes or to finance their seasonal businesses, while others hope to pay for their trips home during mudik, the mass exodus at the end of the annual fasting month.
Jakarta resident Ani said she pawned her goods for security reasons.
“It’s much safer if I pawn my valuable jewelry rather than taking it back to my hometown or leaving it in my empty house in Jakarta,” she said on Wednesday.
As people search for extra cash during Ramadan, state pawnshop operator Perum Pegadaian says it offers a quicker, easier process than local banks, which require customers to show their saving books, identity cards, tax ID numbers (NPWP) and other documents to receive loans.
At pawn shops, “customers willing to pawn their goods only need to show a valid ID card or driver’s license,” Wahyu Handayani, a manager at Pegadaian’s Sudirman branch in Jakarta, told the Jakarta Globe.
Pawnshops commonly see more customers during Ramadan in Indonesia, which has the world’s biggest Muslim population. Muslims account for about 85 percent of the country’s 240 million people.
Ida, a housewife in Pondok Gede in Bekasi, said she went to pawnshops for money to finance her seasonal business of selling kolak , stewed bananas in a heavy coconut and palm sugar syrup that many Muslims eat to break their fast.
Pegadaian’s Senen branch in Central Jakarta expects transactions to rise leading up to the Idul Fitri holiday, which marks the end of Ramadan.
Ramadan started last week and runs until Aug. 19.
“At this time of year we expect a very high increase in customers, probably around 50 to 80 percent,” said Ari, an administrative officer at the branch.
The pawnshop operator’s Senen branch saw a surge in transactions in June, with growth at about 50 percent from May, due to the start of the new school year.
Pegadaian’s Sudirman branch saw transactions increase 30 percent last month, Wahyu said.
Ari said the Senen branch targeted a total turnover of about Rp 250 billion ($26 million) and that the Sudirman branch targeted about Rp 100 billion.
Wahyu said customers at the Sudirman branch would be required to show a valid ID card or driver’s license to receive loans.
Loans range from Rp 50,000 to more than Rp 20 million, the branch manager said, with interest rates ranging from between 0.75 percent and 1.15 percent per 15 days, depending on the size of the loan.
Pegadaian expects the fasting month to boost its total lending transactions by up to 30 percent, company spokeswoman Lucia Retnawidarti said on Wednesday.
She said Pegadaian had already disbursed Rp 50 trillion in loans to its customers by the end of the first half this year.
“We’re targeting at least Rp 110 trillion this year,” she said.
More than 50 percent of loans disbursed during Ramadan are used for business finance, she added.
Musridah, a manager at Pegadaian’s branch in Pondok Gede, agreed, saying the pawnshop’s primary consumers during the fasting month were business owners.
“These business owners want to capitalize on the strong demand by stocking up their inventories, and with higher prices they need more money,” Musridah said while admitting that so far transactions at her branch were still at a normal level.
She said her branch had seen average daily transactions at Rp 350 million during the early days of the month.
Wahyu said that after pawning items in the early weeks of the fasting month, customers often returned again later.
“In the coming weeks, we are expecting people to come in and redeem their goods, because they will have started to receive their Idul Fitri bonuses,” she said.
Ari, from the Senen branch, said many customers returned to get back their gold and jewelry.
“Most people redeem so they can wear their jewelry during the celebration,” he said. “When people come back from their hometowns after the Idul Fitri holiday, that’s when most people come in to redeem their goods.”