When starting a business, learn to use the free media

Starting a business of your own is difficult at best. You will enter the landscape very disadvantaged. You probably don’t have the capital you need. You probably don’t have the name recognition you would like. And you have to compete with established business community. So, how will you manage to get through the maze that stands before most entrepreneurs in the Philippines?

First, you must have a business model. What product or services are you going to sell and who are you going to sell to? Is there a demand for what you are selling? Is there a societal need for your product and services? There has to be.

An important part of any business model is advertising. Just how do you plan to reach the public to offer your product or services? The traditional media of television, radio and newspapers are areas where the established businesses have a big advantage over an entrepreneur entering the business world. Of course, TV and radio advertisements are out of reach for someone with a limited budget. Newspapers may work for some applications but still they can be expensive and still only have a limited reach. For instance, a newspaper advertisement placed in Metro Manila, where I live, will not get you any exposure in the provinces.

So how will you reach the public? Try the free media! There is a new media today that is overturning the old established media business. You have an example of it right here as you read this article. I am writing to you using my free WordPress blog. This is a place where I talk about the pawnshop industry which is my field of business. I often talk of my pawnshop skill training courses of gold and diamond assessing , my pawnshop management courses, pawnshop regulations and the general trends of the pawnshop industry. I have made valuable contacts through this blog and it has a much larger reach than a newspaper. Indeed, I get mail from around the world. And it is all free.

Another internet site that has been of help to me is Sulit.com.ph. Through their business model they allow me free advertisements. Once again, these ads have a much larger reach than newspapers. And since they are free too they fit my budget perfectly.  And once again, I have made valuable contacts through Sulit.com.ph

So while starting a business is a daunting task. Remember that the internet is changing the way people do business. It offers a variety of ways to reach more people for free. You don’t even have to have internet access or a computer as you can access the internet from a café. The free media is something an entrepreneur has to be aware of. It may not be the ultimate success of your business – your skills and product will determine that.  But it does not hurt to be able to reach the public free. So whatever your business is – what are you waiting for?  Get a free WordPress blog and start advertising on Sulit.com.ph today for free.

I only offer WordPress.com and Sulit dot.com as examples because I use them. There many free blogging and advertising sites. You have to do the research and find the sites that work for you. Good Luck!

MIM Pawnshop Skills and Services offers BSP Licensed Pawnshop Auction Services

Presidential Decree No. 114, also known as the “Pawnshop Regulation Act,” sets forth a series of regulations for a pawnshop auction. These regulations are in Secion 15, which is titled “Public auction of pawned articles.” Among the regulations is one that requires all pawnshop auction to be “…under the control and direction of an auctioneer with license duly issued by the corresponding authorities…” In this case the corresponding authority is The Bangko Sentral ng Pilipinas (BSP). In other words an auction must be “under the control and direction” of an auctioneer licensed by the BSP. Or even more simply, a set of books from a pawnshop must be signed off by an auctioneer licensed by the BSP.

There are not many licensed pawnshop auctioneers in the Philippines at this time. Fortunately, for my clients, I am licensed by the BSP to sign auction books. I do this at the most competitive price in the Philippines. My price is P150 per pawnshop branch and I can sign auction books in any province. If you are having trouble with pawnshop auction compliance at a reasonable price –  contact me for help.

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.

 

A Note to our readers on email communications with MIM Pawnshop Skills and Services

We previously advised you here that our old email address had been comprimised and could no longer be used. We want our readers to know that MIM Pawnshop Skills and Services takes it obligations to keep our readers communications secure very seriously. As of today, we have gone through the site and can report back to you, our readers, that we have removed the old address wherever we found it. You can now feel safe to use the email contact form like the one you see below wherever you find it on the site to contact us. Your communication will be secure as we can possibly make them and we will promptly reply to your message. We appreciate your patience and understanding as we have gone through this trying time with our site.

Very truly yours,

Isabel

For more information, use the form below to send MIM Pawnshop Skills and Services an email.

MIM Pawnshop Skills and Services consulting can make a difference in your pawnshop operations

Through my many years in the pawnshop industry I have been employed at every level of the industry. I have managed inventory, performed appraisals and approved transactions large and small. I am familiar with pawnshop regulation compliance, pawnshop security, pawnshop auctions (I am a certified as a pawnshop auctioneer by the BSP) and pawnshop accounting techniques. It is through this lifelong learning in the pawnshop industry that I am able to offer my services as a pawnshop consultant to those just beginning in the industry or to already established pawnshops. I do this as another aspect of MIM Pawnshop Skills and Services.

To gain a better picture of just what kind of consulting MIM Pawnshop Skills and Services has to offer it is probably best to describe what a consult does. A consultant is usually a person brought in from outside the organization to help solve a problem. A consultant offers insight, advice and experienced based strategies that can help an organization more effectively reach its goals by solving problems.  The goal of my consulting is to solve problems and bring more money to the bottom line of a business.

As a consultant I can provide advice about an aspect of the business to make the organization more effective. For instance, as a consultant to an established pawnshop I can analyze their current strategies and make suggestions for improvements. These suggestions might be to provide more staff training, better accounting methods or more security precautions.

Consulting by MIM Pawnshop Skills and Services can help by offering a set of skills or services that compliment the already established procedures within an established organization.  Or, if opening  a new pawnshop is your goal MIM Pawnshop Skills and Services can help by offering strategies to get you started.

Among the areas of expertise that MIM Pawnshop Skills and Services consulting can help you with are:

1.   Pawnshop Business Management

  • Strategic measures
  • Pawnshop malpractices
  • Pawnshop policies
  • Supervision
  • Physical inventory
  • System on auction sale
  • Accounting system
  • Public relations

2.   Pawnshop Operations

  • BSP registration requirements for new pawnshops.
  • BSP rules and regulations
  • Legal aspects
  • Standard operating procedures ( SOP )
  • Bookkeeping
  • Location
  • Security

If you are in need of experienced pawnshop consulting contact MIM Pawnshop Skills and services. I am here to help you.

Pawnshop owners should be ready for stricter BSP regulation enforcement

1995 BSP data shows the total number of pawnshops in the Philippines was 4,173. More recent BSP data shows that the total number of pawnshops in the Philippines rose to 14,800 in the fourth quarter of 2009 from 13,493 [1] in the first quarter of 2008. That is a spectacular rise.

But with growth comes attention. In the case of pawnshops, that attention is now coming from regulatory agencies of the Philippine Government. To put the rise in pawnshops in between the first-quarter of 2008 and the end of 2009 in perspective we may have to look beyond the numbers.

As this January 2009 philstar.com article points out, The BSP began a mapping operation of pawnshops a couple of years ago to determine the number of unregistered pawnshops in the Philippines. These BSP inspections suggested that 26 percent of all pawnshops were unregistered. So in reality, about one-quarter of the pawnshops that registered with the BSP in 2008 and 2009 may have been pawnshops that were in existence but not registered. Once the BSP inspections began many unregistered pawnshops rushed to register to avoid BSP sanctions. That may account for a portion of the rise in pawnshops in the official BSP numbers for 2009.

In addition to finding unregistered pawnshops, The BSP inspections also suggested that about one- third of pawnshops inspected “were found to have violated rules and regulations such as failure to require signature of customers in the pawnshops’ registers, which could abet fencing; failure to attend…”

Pawnshops owners would be well-advised to consider this regulatory action by the BSP as a permanent drive to not only gets fly-by-night pawnshops registered but to begin stricter enforcement of all pawnshop regulations. The BSP will now use an integrated approach with the help of other government agencies and local governments.

The Bangko Sentral ng Pilipinas (BSP) and the Department of Interior and Local Governments as well as local government units would monitor thousands of pawnshops nationwide to prevent fencing, money laundering and other criminal activities, officials said yesterday.

Pawnshop owners have now been put on notice by the BSP that stricter regulation is coming. Do not be caught unaware. Ultimately, it is the responsibility of pawnshop owners to know what the laws are that govern pawnshops and to comply with them.

Resources

  1. Report on Economic and Financial Developments. Bangko Sentral ng Pilipinas. Fourth Quarter 2009

A brief overview of the role of pawnshops in the Philippines

Our parents used to tell us: the moment you start earning, buy some jewelry and other properties.  You can pawn them whenever you encounter financial difficulties.   Mario Lamberte – 1988.

Pawnshops offer financial services known as microlending which is an important source of credit in many developing countries, especially in Asia. Pawnshops fill a void left by the banking system. They provide poor and low-income households with credit that would have not otherwise have been available and increase competition in the credit markets by providing an alternative source of credit for those who are frozen out of loans from banks. This has served as a financial safety net for the poor and low-income households.

Pawnshops can provide these financial services to poor and low-income households for a variety of reasons.  One is that pawnshops fall under less regulation than other financial institutions.

Pawnshops used to operate like a sari-sari store with very little government control. In fact the only time these units came into contact with government agencies was when they paid business registration fees and income taxes. They were not even covered by the usury law enacted in 1916.    Mario Lamberte – 1988.

Beginning in 1972, The Bangko Sentral ng Pilipinas’ (BSP), known as the Central Bank in 1973.was given the authority and responsibility to regulate pawnshops. Presidential Decree 114 (29 January 1973) and the Central Bank Circular No. 374 (13 July 1973) set out specific regulations covering the operations of pawnshops.

Pawnshops are still among the least regulated businesses that fall under the authority the BSP. Under the BSP‘s regulations pawnshops are authorized to lend, but cannot accept deposits and are required to submit regular financial reports. The BSP has financial audit authority over pawnshops and can inspect book records and general business practices. It also has the authority to sanction a pawnshop.

Although in 2009, the BSP did issue a new, more stringent, set of rules that will govern all pawnshops operating throughout the country. 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 are now required to maintain a minimum level of capital or net worth in relation to their loan portfolio as the existing statutory capital of P100,000 has become too small and it is susceptible to the proliferation of “fly-by-night” operators.

Another reason pawnshops can provide these financial services to poor and low-income households is that their loans are backed by hard assets which lowers the transaction cost to the borrower and the lender and eliminates the need to analyze the borrower’s creditworthiness.

Over time the pawn item has changed. In the past, for example, Mario Lamberte noted (1988) that “pawnshops have preferred lees bulky items high-value items like jewelry. With the advent of more competition pawnshops have broadened the type of items they accept as collateral” (page 14). This change continues today with the acceptance of computers, cell phones and other electronic devices as collateral.

Because of the efficiency of pawnshop operations, they have been shown to be a profitable business.  A study for the Philippine Institute for Development indicates that efficient management of pawnshops allows 25% of the gross operating income to flow to the bottom line as net profits (Lamberte, 1988).

The pawnshop industry in the Philippines has seen spectacular growth. This growth has largely been attributable to (1) the role that pawnshops serve in filling a demand that is not being filled by the more traditional banking system: It gets credit to those who don’t have access to traditional bank loans and (2) pawnshops operate with large profit margins. This has not gone unnoticed by small entrepreneurs and job seekers in the Philippines as they have flocked to the pawnshop industry.  

References

  1. BSP Approves New Rules for Pawnshops, The Bangko Sentral ng Pilipinas (BSP), May 4, 2009. http://www.bsp.gov.ph/publications/media.asp?id=2063&yr=2009
  2. Lamberte, Mario. An Analysis of the Role of Pawnshops in the Financial System. Manila: Working Paper Series no. 88-07, Philippine Institute for Development Studies, June 1998, 36 pp. http://www3.pids.gov.ph/ris/wp/pidswp8804.pdf