“Phnom Penh: Recently, the Ministry of Economy and Finance announced through newspapers to inform vendors who want to run pawn shop operations to apply for a license very soon, because such operations can now be legalized. This information shows that pawn shop operations become legal.
“An official of the Ministry of Economy and Finance said on 12 January 2010 that the ministry had issued an announcement about the provision of licenses for the operation of pawn shops to accept, buy, and sell pawn property, and for the operations to accept collateral via transfer. Based on this notification, those who intend to run or are already running pawn shop operations can apply for licenses so as to make their operations legal.
“According to the law, quoted for the announcement about the operation of pawn shops that Rasmei Kampuchea received on 1 February 2010, a license for such operations to accept, buy, and sell pawn property costs Riel 2,000,000 [approx. US$470] per year, and a license to open a branch costs Riel 1,000,000 [approx.US$235]. And a license for the operation to accept collateral via transfer costs Riel 1,000,000 per year and only Riel 500,000 [approx. US$120] to open a branch. The operation to accept collateral via transfer, according to the official’s explanation, is also a kind of pawn shop operation, but documents for the sales and for the buying are issued.
“Based on this notification, to run an operation to accept, buy, and sell pawn property, an owner needs to have a minimum capital of Riel 80,000,000 [approx. US$19,000], and needs to deposit 10% into an account of the ministry. As for the operation to accept collateral via transfer, a minimum capital is Riel 40,000,000 [US$9,500] is needed, and a deposit of 10% into the account of the ministry. That deposit can be taken out only when the ministry permits it.
“But the announcement does not define interest rates. They will be based on mutual agreement, but should not be against the law [but it is not said here what the law says].
“It is questioned how a license can protect the sound operation. An official of the Ministry of Economy and Finance said, ‘If you have a license, your operation is legal. When the authorities go to check the operation, it is already legal. But if you operate illegally, to only then apply for a license cannot help.’
“It should be noted that previously, there was no need to have a licenses to run a pawn shop. Last year, immediately after the head of the government had issued an order, police strongly suppressed pawn shops, seizing pawn property at pawnshop unreasonably though there was no law, making some people to fear also when running such a shop now. Now, there is a law – but will there be major trouble again?” Rasmei Kampuchea, Vol.18, #5116, 3.2.2010