Extending credit

Think tank: Social Market Foundation

Author(s): Jake Shepherd

April 19, 2022

This report from UK think tank the Social Market Foundation looks at pawnbroking customers’ options.

This report from Social Market Foundation think tank examines the role of pawnbroking in customers’ financial lives. Not everyone has access to an overdraft or a credit card, so what do they do when they need cash to make it to the end of the month? Pawning household items is one option. Our research uses in-depth interviews to build a picture of why people use pawnbrokers, how satisfied they are with them, and what would they do if stores were no longer available. We found that pawnbroking provides a vital service to solving customers’ cash flow problems, allowing them to pay for essentials such as food, bills, and rent – particularly at the end of the month when cash is low. If pawnbroking became unavailable as an option to them – as may be the case given the decline in the industry, from 2,091 shops in 2014, to 865 in 2021 – customers are unsure what they would do. In the context of rising living costs, a lack of access to credit could therefore be devastating for customers.