It refers to the an item of personal belonging and of value higher than the loan, pledged as security or collateral for a loan or debts. Such personal belonging or property is deposited with pawnbrokers who has the right to encash such pawns incase there is a default in repayment of the loan. The interest rates are very high and the loan amounts are small. Pawnbrokers are licensed by the government.

Close Bitnami banner