In this note, we put pawnbroking into a global and historical context: i) the global market is large, ca.$40bn, UK just ca.5%; ii) pawnbroking is widely adopted across a range of cultures/geographies from China, India, Islamic countries to US, Europe and UK; iii) many UK immigrants are comfortable with pawnbroking from experiences in their country of origin; iv) the largest listed pawnbrokers trade at over 2x the PER rating of H&T Group plc (LON:HAT) with similar forward earnings growth; iv) it is generally a regulated business with largely favourable regulators’ comments, as in the UK. Pawnbroking has been available globally for centuries, debunking the misconception some have of it as a UK Dickensian practice.
- Global business relevance to H&T: In business terms, the key factor is that many UK immigrants are familiar with pawnbroking services creating a new customer base. Some estimate that nearly a fifth of all owned gold in India is pledged. 1.5m Poles are estimated to have used the service. The Philippines has 16,000+ pawn shops.
