Growing prosperity fails to dull shine of golden balls

Ireland's few remaining pawnbrokers show no signs of shutting up shop, notwithstanding the impressive economic statistics being spawned by economic prosperity. On the face of it, low unemployment, historically low interest rates and rising incomes would seem to sound the death knell for the State's pawnshops. However, down on the street it's business as usual under the sign of the three hanging gold balls.

Reputed to be the earliest recorded lending institutions, pawnbrokers emerged from Europe in the Middle Ages and for many years were the main source of credit. They acquired their instantly recognisable symbol of the three golden balls courtesy of the coat of arms of the famous Medici family in Italy. Indeed, Queen Isabella of Spain is said to have pawned her jewels to finance Christopher Columbus's trip to America.

In the interim, the business has acquired a slightly less auspicious reputation and for many conjures up images more reminiscent of a Dickens novel rather than a bona fide credit facility licensed by the Department of Consumer Affairs.

Just four pawnshops continue to ply the trade in Ireland and all are situated within walking distance of Dublin city centre. "Going back years there would have been lots more. Thirty years ago there probably would have been over 30 shops in Dublin alone," according to Mr Pat Kearns, proprietor of Kearns Pawnbrokers in Queen Street near Smithfield Market.

Monaghan-born Mr Kearns has been in the business for some 20 years and follows in the footsteps of his uncle and grand-uncle, who established the shop in 1924. In fact, all the remaining brokers carry on a strong family tradition.

The pawning system works like this. The customer hands over their easily tradeable goods - called pledges - to the pawnbroker, who values them and advances cash on this valuation. A four-month contract is signed obliging the customer to pay interest of 2 per cent per month, or part thereof, on the cash advance. The four months can be extended by agreement but should the pledges be eventually unredeemed, they are put up for public auction.

Kearns Pawnbrokers holds two monthly auctions of unredeemed pledges, one at Herman and Wilkinson Auctioneers in Rathmines and the other at O'Reilly's Auctioneers on Lord Edward Street. Mr Kearns maintains that less than 5 per cent of pledges go to auction and that more often than not the highest bid is below the amount advanced. "We'd be quite happy if nothing went to auction," he insisted.

Jewellery accounts for the vast majority of pledges, although musical instruments, hi-fi equipment, cameras, golf clubs and power tools also figure prominently. Pledges are valued just below wholesale prices and arguments over valuations are a rarity. There is no specific limit, upper or lower, on the cash advanced to the customer but the average in the Kearns establishment is £50-£100 (€63-€127).

Pawnbrokers maintain they get a wide variety of clientele, but the common thread that binds them together is the need for immediate credit coupled with poor access to more conventional financial channels.

Mr Kearns said: "If you go into the bank looking for money they'll want to know what you had for breakfast. Bring them in the deeds for your house, go through all the questions and you still mightn't get what you want at the end of the day. Whereas here you get money into the hand.

"We had a market dealer in here once and he got offered goods in wholesale that he really wanted to buy but the bank weren't interested. He spent a half day trying to see the bank manager, who told him no at the end of the day. He came in here, he had his money and goods for market the next day. He came back in a couple of days and redeemed his stuff."

While short-term finance for utility bills and special occasions remains the bread and butter of pawnbroking, Dublin Corporation's zealous car clamping policy has furnished a new stream of business.

Irate drivers, short on liquidity, pawn watches and jewellery to raise the cash that will release their vehicles, generally returning the next day to redeem their goods.

Kearns Pawnbrokers gets most of its custom from the Dublin area, mainly from the inner-city and the large estates in the suburbs, but they have customers from as far afield as Cork. "We're getting a lot of new addresses coming in from the new estates. People buying houses are stretched now and this will only get worse as interest rates rise. There's always going to be a solid business out there," Mr Kearns added.