Singapore cost of living sees pawnshops thrive

Singapore cost of living sees pawnshops thrive

SINGAPORE - Singaporean housewife Siti Khadijah Abdul Rahman accumulated a few thousand dollars' worth of gold accessories over the past two decades, but now a rising cost of living is forcing her to pawn them.

With a stretched household budget that must also cater to school expenses for her two teenaged children, the 49 year-old is pawning her gold to relieve pressure on her security guard husband, who earns $1,500 a month.

"Pawning is better than going to friends or family when you have budget problems," said Abdul Rahman. "When I have money, I will claim it back."

She is one of a rapidly increasing number of people opting to take short-term pawnshop loans to try to keep up with rising prices, in what the Economist Intelligence Unit has ranked the world's sixth most expensive city to live in.

Singapore's pawnshop industry has seen phenomenal growth at a time when rising prices and a slowing economy are putting pressure on the household budgets of middle- and lower- income families.

Loans surged to $7.1 billion in 2012, up 43 per cent on-year, according to industry registry data.

Singapore has one of the highest concentrations of millionaires relative to its population, but the city-state's per capita income of more than $65,000 in 2012 masks a sharp income gap between the richest and poorest.

The three major pawnshop chains - which make up the bulk of the nearly 200 pawnshops across the island nation of 5.3 million people - have sought to take the shame out of using personal property as collateral for short term loans.

"You look around you, this is probably one of the most expensive places in the world," said Derek Da Cunha, a local socio-political observer.

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