A HISTORY OF PAWNSHOPS

The term "pawnshop" comes from the name of a region in Italy - the changers from Lombardia were engaged in such operation as far back as the Middle Ages. Constantly growing demand of the population for small-size loans had maid several attempts to organize institutions similar to modern pawnshops. But they were not successful, that's why we can consider the history of the pawnshops in their modern sense to start from 1462 when a credit institution for granting the loans on security was founded in Italy. The founder of this institution was Franciscan monk Barnabe de Terni. He proposed to collect money for foundation of a charity bank. With the money collected he set up a banking institution, "Mont de Piete", for granting small-size loans without interest.

Thanks to the cloisters similar establishments for granting small-size bearing no interest loans have been founded in Savoia, Mantua and Florence. After 30 years of work, in 1943 Franciscan monks founded "Mont de Piete" institutions, but on more extended basis, in different places of Italy. So long as offices had their own expenses they granted loans at 6% annual interest.

A picture of pawnbroking in Germany in 1485

UK Pawnbroking - A Brief Background
Pawnbroking is quite simply the lending of money against the security of items left by the borrower. As a principle it has been in existence since biblical times and in the United Kingdom records go back to the 1600's. The traditional sign of the three balls is taken by some to have come from the Medici family of moneylenders whose crest was three gilded pills. It was used then, and still is, by people from all walks of life. For the underprivileged it was a necessary part of life and for the gentry it was a useful way of tiding them over.

Just after WW2 there were over 5000 outlets in the UK lending against anything from clothing to diamond tiaras. It was not uncommon for a busy pawnbroker to serve over a 1000 customers on a busy Friday or Saturday. This number reduced dramatically with the advent of inflation, the welfare state, and greater prosperity in the country. By the 1970's the number of companies had reduced to no more than 50, and with the high bank rates of the time leaving the pawnbroker with only a 2-3% annual return on its major loans it made it uneconomic to provide any sort of service.





Early pawnbroking was unregulated and the very high rates of interest charged by the downmarket "Dolly Shops" of the 18th and 19th century gave the whole trade an unwelcome history that persisted until the 1980's. The first regulation of the trade was the Pawnbrokers Act of 1878, which laid down specific amounts that could be charged for various levels of loan and the duration of those loans. This act remained in force until the whole of pawnbroking law was incorporated into the Consumer Credit Act of 1974. The new act laid down new restrictions, but removed others, and pawnbroking became again a practical proposition for pawnbroker and customer alike.

Since the 1980's pawnbrokers and customers have both increased in numbers and the trade has now become an accepted extension to the clearing bank system for customers requiring short-term loans as an addition to their normal budgeting.

How "Pawnbroker" is written in other languages.

Lithuanian... Lombardas
Polish... wlasciciel Lombardu
Bulgarian... Sobstven
Italian... mutuante su pegno, Lombard
Dutch... Lommerdhouder; pandjesbaas
Czech... majitel zastavarny
Danish... pantelaner
French... preteur sur gages
German... Pfandleiher
Portuguese... prestamista sob penhor
Spanish... prestamista sobre prenda, sacaprendas
Estonian... pandimajapidaja
Finnish... panttilainaaja
Swedish... pantbelaning
Mexican... Monte de Piedad
Hispanic... Casas de Empeno