BSP Approves New Rules for Pawnshops

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Ladies and Gentlemen in the Pawnshop Industry:

MIMPSS Followers

We have been continuously receiving calls, text messages and emails from concerned people asking about “Rights of Pawners.” As a Pawnshop Consultant by profession, we make ourselves responsible to answer all questions and concerns regarding PAWN issues through having patience of educating them about the “Responsibilities and Rights” of both Pawner and the Pawnshop. 

My concern to all Pawnshops in the Philippines, it is very important that you provide all staffs a proper training not only on the appraising skills but also on the skills on all aspects of pawn operations. Customer Service Relations is very important and a plus factor. Each store branch should have at least a representative to attend and be updated of the BSP Rules and Regulations for pawnshops so as they could explain well all concerns of their pawners. 

MIMPSS is offering a FREE Consultation pertaining to pawnshop operational concerns. 

An update to all pawnshop staffs who may not be aware of some BSP Rules and Regulations, here is one good read for you.

The Monetary Board, the policy making body of the Bangko Sentral ng Pilipinas, approved on 30 April 2009 a new set of rules that will govern all pawnshops operating throughout the country.

Pawnshops have increased in number over the years and they have provided an alternative source of credit to a large segment of our population, particularly those who do not like to go to banks.

The new rules will replace the existing implementing rules and regulations of Presidential Decree No. 114 also known as the Pawnshop Regulation Act issued in 1973.

The new rules are designed to enhance consumer protection and foster confidence in the pawnshop industry by the pawning public. For instance, proprietors, partners, incorporators, directors, stockholders and officers of pawnshops must meet certain “fit and proper” standards to ensure that pawnshops are owned and run by people without any derogatory record and to promote good governance. Pawnshops will also be required to maintain a minimum level of capital or net worth in relation to their loan portfolio. The existing statutory capital of P100,000 has become too small and it is susceptible to the proliferation of “fly-by-night” operators.

Under the law, pawners have 90 days after maturity to redeem their pawned articles and pawnshops must notify their clients within the 90 day period before they can sell the pawned items in an auction. For the convenience of pawners, the new rules will require them to indicate in the pawn ticket their preferred mode of receiving the notice, whether by mail or courier to a given address, or by SMS or text through a specified mobile phone.

On the part of pawnshops, they will be required to comply with explicit “Know Your Pawner” procedures consistent with the requirements of the Anti-Money Laundering Act and to address concerns on the Anti-Fencing Law. For transparency and to minimize malpractices, pawnshops will be required to post in their premises the Acknowledgement of Registration or Authority to Operate issued by the BSP, business days and hours of the pawnshop, their interest rate and charges for loans, among others.

The new rules will take effect fifteen (15) days after publication in the Official Gazette or a newspaper of general circulation in the Philippines.

Recently, the BSP signed a Memorandum of Agreement with the Department of Interior and Local Governments on the sharing of information between BSP and the city and municipal government units to ensure that only those that have the proper business permits and registered with the BSP are transacting with the public.

For all concerns can leave a message through the following:

skype : ma.isabelmendoza

email: maisabel.mimpss.mendoza@gmail.com

Facebook: http://www.facebook.com/mimpssmaria

contact nos.: 09065118875 / 09391520485 / 09238728440

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Malpractise very rampant in the pawnshop industry, Philippines

Ma.Isabel S. Mendoza, a pawnshop consultant from the Philippines, founder and coach of M.I.M Pawnshop Skills and Services (MIMPSS)and with Mr.Jerry Whitehead, an expert pawnshop consultant from Florida USA, known to be the CEO of the Pawnshop Consulting Group (PCG), together will work hand in hand to pursue our plans of improving and developing the operational and management system in the pawnshop industry in the Philippines.

We as an Independent auditor, examines, monitor and analyze every activity related to a company’s operation including the business structure, employee behavior and information systems. In performing our audit, we review your systems of operation to help you identify issues before they become substantial problems. Helps you identify risky behavior by individual employee and threats posed by inside and outside parties, such as attempts to steal cash or personal property or do any wrongful act or malpractice.

Through the process of internal audit from an independent auditor, we can prevent and control the staffs to do wrongful acts or malpractice like, act of conniving from outside and between staffs and officers in all branches to which is very rampant now a days in the pawnshop industry. The audit will be done on a surprise visit and on a random at times.

The scope of our Internal Audit for all branches, as follows:

1.) Re-appraising all outstanding pawned

a.) Check outstanding pawned if it underwent the right
procedural test and properly appraised, particularly
gold and diamond jewelry as well as gadgets.

2.) Physical Inventory

a.) Check all pawned items if intact inside the vault.

3.) Display Inventory

a.) Check all items if tally to the inventory record.

4.) Cash Flow (check and balance)

a.) Check the daily cash in cash out transactions
b.) Additional funds
c.) Expenses

5.) Monthly audited report (per branch & consolidated)

6.) Evaluation of pawnshop staffs per branch

7.) Pawnshop staffs quarterly meeting

a.) Enhance skill in jewelry and gadget appraisals.
b.) Motivate staffs through an open communication.
c.) Setting up strategical plans to work on hand in hand and put in to action
for the improvement and betterment of the company.

For more information and consultacies:
Contact nos. 09065118875 / 09432905279″ widthimage-35225″ /></a>

Check out website of Pawnshop Consulting Group (PCG)for more information!

http://www.pawnshopconsultinggroup.com
pawnshopconsultinggroup@gmail.com

Malpractise very rampant in the pawnshop industry, Philippines

Ma.Isabel S. Mendoza, a pawnshop consultant from the Philippines, founder and coach of M.I.M Pawnshop Skills and Services (MIMPSS)and with Mr.Jerry Whitehead, an expert pawnshop consultant from Florida USA, known to be the CEO of the Pawnshop Consulting Group (PCG), together will work hand in hand to pursue our plans of improving and developing the operational and management system in the pawnshop industry in the Philippines.

We as an Independent auditor, examines, monitor and analyze every activity related to a company’s operation including the business structure, employee behavior and information systems. In performing our audit, we review your systems of operation to help you identify issues before they become substantial problems. Helps you identify risky behavior by individual employee and threats posed by inside and outside parties, such as attempts to steal cash or personal property or do any wrongful act or malpractice.

Through the process of internal audit from an independent auditor, we can prevent and control the staffs to do wrongful acts or malpractice like, act of conniving from outside and between staffs and officers in all branches to which is very rampant now a days in the pawnshop industry. The audit will be done on a surprise visit and on a random at times.

The scope of our Internal Audit for all branches, as follows:

1.) Re-appraising all outstanding pawned

a.) Check outstanding pawned if it underwent the right
procedural test and properly appraised, particularly
gold and diamond jewelry as well as gadgets.

2.) Physical Inventory

a.) Check all pawned items if intact inside the vault.

3.) Display Inventory

a.) Check all items if tally to the inventory record.

4.) Cash Flow (check and balance)

a.) Check the daily cash in cash out transactions
b.) Additional funds
c.) Expenses

5.) Monthly audited report (per branch & consolidated)

6.) Evaluation of pawnshop staffs per branch

7.) Pawnshop staffs quarterly meeting

a.) Enhance skill in jewelry and gadget appraisals.
b.) Motivate staffs through an open communication.
c.) Setting up strategical plans to work on hand in hand and put in to action
for the improvement and betterment of the company.

For more information and consultacies:
Contact nos. 09065118875 / 09432905279image

Check out website of Pawnshop Consulting Group (PCG)for more information!

http://www.pawnshopconsultinggroup.com
pawnshopconsultinggroup@gmail.com

BSP approves stricter rules on pawnshops to protect consumers

MANILA, Philippines-Pawnshops will be obliged to maintain a minimum level of capital or net worth in relation to their loan portfolio as the policy-making Monetary Board approved a new set of rules on all pawnshops operating in the country.

“The existing statutory capital of P100,000 has become too small and it is susceptible to the proliferation of ‘fly-by-night’ operators,” the Bangko Sentral ng Pilipinas said.

Under the 36-year old Pawnshop Regulation Act issued in 1973, the minimum paid-in capital of any pawnshop will be P100,000.

The new rules will replace the implementing rules and regulations of Presidential Decree No. 114, which provides definite and uniform standards for pawnshop operations since these provide an additional source of credit especially for small borrowers left unserved by the banking and other financial institutions in the country.

The BSP noted pawnshops have increase over the years and have provided an alternative source of credit to a large segment of the population.

“The new rules are designed to enhance consumer protection and foster confidence in the pawnshop industry by the pawning public,” the BSP said.

Proprietors, partners, incorporators, directors, stockholders and officers of pawnshops must meet “fit and proper” standards to make sure these are owned and run by people “without any derogatory record and to promote good governance.”

Borrowers from the pawnshops will be required to indicate in the pawn ticket, or pawnbroker’s receipt for a pawn, their preferred mode of receiving the notice whether by mail or text message for their convenience.

Under PD 114, they have 90 days after maturity to redeem their personal property delivered as security for a loan while pawnshops must notify their clients within the 90-day period before they can sell the items in an auction.

The new rules will compel pawnshops to comply with the “Know Your Pawner” procedures in line with the Anti-Money Laundering Act and to address concerns on Anti-Fencing Law.

The Anti-Fencing Law imposes heavy penalties on persons who profit from robbery and theft while Anti-Money Laundering prescribes penalties against money laundering and terrorist financing.

“For transparency and to minimize malpractices, pawnshops will be required to post their premises the acknowledgment of registration or authority to operate issued by the BSP, business days and hours of the pawnshop, their interest rate and charges for loans, among others,” the BSP said.-Ruby Anne M. Rubio, GMANews.TV

Bold Philippines pawnshop heists continue

When it comes to pawnshop security, the best defense is a good offense. If you own a pawnshop, make sure you understand that it

FILE. An employee looks at the vault of a pawnshop in Barangay Damayan after robbers broke into it using an acetylene torch

is up to the you to protect your businesses. MIM Pawnshop Sills and Services always promotes being a proactive business owner. Experience teaches that it is important that a pawnshop owners learn to assess their businesses for its shortcomings

Back in 2010, we posted an article on pawnshop security when a rash of bold robberies of pawnshops were being reported on by the Philippine media. It is titled: Is your Pawnshop secure? If you are a pawnshop owner we recommend you read it. We think the article is still timely and has the basic common sense information a pawnshop owners can use to protect their businesses. For certain, the topic is still timely as you can see by the article below from philSTAR.com. Unfortunately, this trend of brash robberies still has momentum in the Philippines. This momentum is likely to continue, and possibly increase, as jewelry prices increase due to the rise of gold and silver prices.

If you, as a pawnshop owner, feel you need help to understand the security issues involved in the pawnshop business, be sure to contact MIM Pawnshop Skills and Services to set up a consultation appointment. Pawnshop management is our business and we can bring you the information you need to keep your pawnshop secure. We support a proactive approach that identifies the deficiencies before they hit your bottom line.

From philSTAR.com

MANILA, Philippines – Interior and Local Government Secretary Jesse Robredo warned local officials yesterday on the new modus operandi used by criminals in robbing jewelry shops, pawnshops and banks.

Based on the information provided by Chamber of Pawnshops of the Philippines, Robredo said local and police officials should be on alert when individuals take out leases on vacant business space beside, above, or behind an existing pawnshop, bank or jewelry shop.

He said these groups start their operations at night, especially on long weekends, by disconnecting the alarm system and security camera first then drilling through the adjoining walls to gain entry.

“After which, they will forcibly open the vault with a portable acetylene torch and cart away valuable materials such as cash and jewelry,” he added.

In case there are no vacant spaces for rent close to the establishment and if it is located near creeks or waterways, Robredo said these syndicates resort to forcible entry, underground tunneling or passing through a big drainage system along the street in front of the target establishment.

“In this case, they open the floor of the vault of the pawnshop as an entry point,” he said. Robredo called on all barangay officials, as chairpersons of the barangay peace and order committee, to immediately mobilize on a regular basis their barangay tanods for routine patrols during the night until the wee hours of the morning.

“Barangay officials should closely coordinate with and immediately report to the local police any suspicious movements or persons roaming in areas near the said establishments so that the latter can undertake more in depth surveillance and make the necessary arrests,” he said.

Pawner Rights: The Handbook on Consumer Laws

The Handbook on Consumer Laws published by the Bangko Sentral ng Pilipinas (BSP) lays out some of the basic rights of a pawner when dealing with a pawnshop. MIM publishes them here as guidance for pawners and suggest all pawners know their rights. Also be aware that these may not be the only rights pawners have under BSP regulations.

Pawnshop Transactions

Section 4303P, MORNBFI*:

gives the right of the pawner to renew his loan for such amount and period as may be agreed upon between the pawnshop and the pawner, subject to conditions provided by the MORNBFI; it further gives the right of the pawner who fails to pay or renew his obligation to redeem his pawn ninety (90) days from the date of maturity by paying the principal amount of the loan plus the amount of interest that shall have accrued thereon

Section 4322P, MORNBFI:

requires the following information to be disclosed in the pawn ticket:

  1. amount of the principal loan;
  2. interest rate in percent;
  3. period of maturity;
  4. description of the pawn;
  5. expiry date of redemption period; and
  6. such other terms and conditions as may be agreed upon between the pawnshop and the pawner

Section 4323P, MORNBFI

requires the pawnshop to notify the pawner in writing on or before the expiration of the ninety (90)-day grace period:

  1. that the pawn shall be sold or otherwise disposed of in the event that the pawner fails to redeem the pawn within the ninety (90) – day grace period; and
  2. the date, hour and place where the sale shall take place

It further provides that the pawnshop may sell or dispose of the pawn only after it has published a notice of public auction of unredeemed articles held as security for loans in at least two (2) newspapers circulated in the city or municipality where the pawnshop has its place of business, six (6) days prior to the date set for the public auction. In remote areas where newspapers are neither published nor circulated, the publication shall be complied with by posting notices at the city hall or municipal building of the city or municipality and in two (2) other conspicuous public places where the pawnshop has its place of business.

Section 4324P, MORNBFI

requires public auctions to be held either at the pawnshop’s place of business or any public place within the territorial limits of the municipality or city where the pawnshop conducts its business

Section 4182P, MORNBFI

No pawnshop shall close or transfer its place of business within three (3) months following the maturity of any loan or pledge, or before any pawn shall have been sold or disposed of

*Manual of Regulations Non-Bank Financial Institution

Resources

  1. Handbook on Consumer Laws. Bangko Sentral ng Pilipinas 13 2007. SES Consumer Affairs Unit. Page 12-13.

 

Pawnshops need to be proactive about raising productivity and their employee’s skills

A lunch break at the training session for JPA Pawnshop in Tarlac Province

Last week I posted on a report in the Philippine Star that highlighted the mismatch of skills of the unemployed and the skills needed to fill the new jobs the economy is producing.  In the story, Labor Secretary Rosalinda Baldoz characterized the situation like this: “Jobseekers have difficulty finding jobs because they possess skills that are not needed by companies.”

(Click here to learn more about the Philippine Star story.)

In my earlier post I said that this dilemma may have brought Philippine pawnshops to a crossroad. Pawnshops in the Philippines are growing and while there is a high unemployment rate the simple fact is the skills needed to fill positions in the growing pawnshop industry are unlikely to be found in the ranks of the unemployed.

So where will the worker come from to fill the news jobs.It is easy to suppose that pawnshops can lure employees away from each other but that does not address the basic imbalance that there are more jobs in the pawnshop industry than qualified applicants.One solution to the problem is application of technology within pawnshops in order to run a more efficient operation. Technology is always going to be a part of the solution. In one example computerized software can make an impact on productivity. Another critical example is analytical devices like precious metal testers and diamond that can make assessing quicker and more accurate at the same Time. This type of productivity improvement is always going to be part of the solution.

(Click here to see the MIM Pawnshop Skills and Services “Pawnshop Tool Catalog.)Training the successful JPA graduates

After productivity improvement come the basic skills of the employees themselves. First, when employers add computerization and precious metal testers to businesses employees have to run the computers and the testers.

There will always be a manual component to jewelry assessment. My field experience also tells me there is already a problem with pawnshops using faulty procedures to assess gold and diamond jewelry. This can be disastrous for a pawnshops profit margin. Proper loan values cannot be determined without an accurate assessment.

(Click here to see the MIM Pawnshop Skills and Services Skill Courses.)

In the examples above the skill set of the employees are critical. If a pawnshop industry is going to grow and thrive the problem of skilled employees has to be addressed.

Earlier this week the Wall Street journal published a story that shows this mismatch of skills between the unemployed workers and new economy jobs is not unique to the Philippines. It is also characteristic of the economy in the United States. There are two important aspects to the story that I think are applicable to the Philippine pawnshop industry. It shows that a lack of skilled employees can impact a business’s growth, sales revenue and bottom profits. It also showed what some companies there are doing to overcome the problem.

At Mechanical Devices, which supplies parts for earthmovers and other heavy equipment to manufacturers such as Caterpillar Inc., part owner Mark Sperry says he has been looking for $13-an-hour machinists since early this year. The lack of workers is “the key limitation to the growth of our business and to meeting our customers’ expectations,” says Mr. Sperry. He estimates the company could immediately boost sales by as much as 20% if it could find the 40 workers it needs.

Trips to several job fairs yielded almost nothing, so the company set up a 10-week training program to create its own machinists. Out of the first group of 24 trainees, 16 made it to graduation.

(Click here to learn more about the Wall Street Journal story.)

The first thing to note about the case above is that a lack of skilled employees is costing the company, Mechanical Devices, 20% in sales revenue. I believe it is not going too far to say that could also be the circumstances the Philippine pawnshop industry.

The second thing to note is that the company is now proactively combating its crisis by setting up an in-house training program. That is what I promote and that is what my clients are doing. It may be the only way out of this situation.

If you own a pawnshop, do not be caught short of productivity improvements and skilled employees. Be proactive and solve the crisis before it affects your profit margin. If you are in need of answers contact me and I will work with you to improve your productivity and help you to set-up in-house training programs. My consulting and training programs are the best in the country and are designed to make your pawnshop a success.