Pawnshop emerges from the shadows

But now the ancient trade is coming out of the shadows and moving into the financial mainstream.

Pawnbrokers are moving into high-street shopping malls and pinching customers from banks and building societies as major modernisation programmes and a desire for instant cash attract new customers.

And although their core business may remain the hard-up, they are also being used by affluent clients of all kinds who pawn upmarket items in exchange for fast loans they might have gone to the bank for in the past.

According to one pawnbroker in Scotland, an Edinburgh doctor keeps a boxed pair of Rolexs, worth about 5,000, for whenever he needs a quick cash injection. And Chinese restaurant owners are also regular customers, with pledges of jewellery worth up to 25,000.

Another talks of clients who include the landed gentry, professionals and people looking for an instant deposit for a house to compete in the buoyant Edinburgh and Glasgow housing markets.

Business is now so good that one of the biggest Scottish chains, Harvey and Thompson, will tomorrow start work on a 125,000 renovation of its flagship store in Edinburgh.

It is also planning to open a new store in Greenock to add to the six it has already opened in the Glasgow area.

Managing director John Nichols said the pawnbroking business no longer carried its legendary stigma.

"The same service is there and always will be there, but we are now seeing our whole customer profile change," he said.

"We now have to make sure that more people realise that the whole industry is changing too. I want them to come into us rather than going into their high-street bank or building society."

Edward Fox, owner of three pawn shops including Duncansons & Edwards in Edinburgh’s Queen Street and two Robert Biggar stores in Glasgow, said: "Pawnbroking attracts all sorts of people now, we see every type of person you could think of.

"We get junior doctors who need some instant cash, and I have recently served the son of a titled man as well as the chairman of a very well-known company.

"People use us to get money for things they wouldn’t have years ago, like a holiday, money for a car or a deposit on a house.

"It’s become a much more common source of instant cash for all sorts of people."

Pawnbroking, symbolised by the sign of three golden balls hanging over the doorway, dates back at least 3,000 years.

When Charles I needed cash to fight the English Civil War, his queen, Henrietta Maria, went to The Hague to pawn the crown jewels. But another historical figure, Charles Dickens, was dismissive of the trade. In 1835, he wrote: "Of the numerous receptacles for misery and distress with which the streets of London unhappily abound, there are, perhaps, none which present such striking scenes as the pawnbrokers’ shops."

After a steep decline during the 20th century, the number of pawn shops has stabilised at about 800. And most are now owned by large chains rather than local businessmen.

Elaine Kempson, professor of personal finance at the University of Bristol, is finalising a study of the new face of British pawnbroking.

"Pawnbrokers have come of age and have become accepted as financial providers rather than back-street boys," she said. "There isn’t as much shame in using them now as there was in the days when people redeemed their suits for Sunday best and then pledged them again on Monday."

The whole business of pledging - parting with goods to act as security against a loan - is also changing, Kempson said. Curtains, carpets and bedding were out, to be replaced by expensive jewellery and watches.

Customers have up to six months to pay off the loan, which is usually half the value of the goods pledged. They will also be expected to pay interest of up to 7% - higher than a bank but often accepted as a price worth paying for the speed of the financial transaction.

Brokers believe the shift towards respectability came when the industry was regulated under the Consumer Credit Act in the 1990s. It forced the industry to become more image-conscious and in return the customer mix changed.

"The number of customers in the AB social classes now stands at around 6%," said Nichols. "That would have been unheard of a few years ago."

The renovations on his Edinburgh store are being made to reflect the changing times.

"Pawnbroking is a business that lay dormant for thousands of years, so we had to do something to survive.

"What we want to offer is a professional image and a modern retail finance environment. The stigma is fast disappearing and there is no need anymore for people to go round and knock at the back door."

RHYME AND REASON

"HALF a pound of tuppeny rice, half a pound of treacle, that's the way the money goes, pop goes the weasel."

This old nursery rhyme is, in fact, a reference to the seedier side of life in 18th century London, and what was for many the regular visit to the pawnbroker.

Pop is slang for pawn, while weasel is a corruption of whistle, the Cockney rhyme for suit. It was clothes that were then often pawned in exchange for cash for alcohol.

While pawnbrokers may not be able to claim membership of the oldest profession, there is evidence dating them to the Chinese dynasties of 3,000 years ago

as well as to classical Greek and Roman times.

Pawnbroking as we know it today can be traced to the Middle Ages but it was only in the mid-18th century, when people began to sing that nursery ryhme, that the distinctive symbol of pawnbroking, the three golden balls, was generally adopted by the profession.

It derives from the discs that appear on the lower field of the coat of arms of the Medici family, in whose territory the Lombard Goldsmiths originated.

The real growth of pawnbroking in this country started with the Industrial Revolution and the subsequent process of urban development.

It was in response to the scale of that growth that the National Pawnbrokers Association was founded in 1892 to provide representation for the profession as a whole.