CHAPTER 1Commercial bank is a service type industry, that has 5 types. 1st is universal banks (also called "expanded commercial banks"), thrift banks, rural banks, government-owned banks and commercial banks. Commercial banks are the heart of our financial system. They hold the deposit of millions of person, government, and business units. The ability of the commercial banking system to perform its tasks efficiently and in harmony with our needs and economic goals depends in large measure on efficient management. The history of banking in the Philippines can best be reviewed by dividing into 3 periods Spanish era, American era and 4 years Japanese occupation and post-war and independent era

THE SPANISH ERA

The first organized credit institution in the Philippines were known as obra pias which began to be established in the late 16th century. The capital of these institution came from pious Catholics, and the income was intended for charitable and religious purposes. Most of the funds were lent out to traders who used the to finance their commerce with Acapulco. This came to an end in 1820, and by 1851, they were almost non-existent. The year 1851 saw the opening of the 1st important commercial bank in the Philippines. This was the banco espaol-filipino at present (bank of the Philippine island). Its charter was originally granted in 1828 but it was not until 1851 that this institution commenced operations. The bank engage in general banking functions and finance in a limited way the foreign trade of the island. It was also granted the privilege of note issue by a royal decree on October 7, 1854. The opening of Suez Canal in 1869

made the European markets more accessible at lesser cost to Philippine products. British capital began to be attracted towards the island and in 1873 the chartered bank of India, Australia and china established an agency in the Philippines. Two years later, the Hong Kong and Shanghai banking Corporation, another British-owned bank, put up a branch. Both engaged in general banking business but confined most of their activities to the buying and selling of drafts and bills of exchange, so that they were more of exchange banks than commercial banks although they received deposits to a considerable extent. They are operating today as commercial banks. In 1882, a savings bank, known today as Monte Peninsular Ultramarino of Madrid was likewise opened in the island in 1883 but halted operations 4 years later. At the end of Spanish regime, therefore, there were 4 banks, 3 commercial and 1 saving bank doing business in the Philippines. The supervision and regulation of the banking business during the period were negligible. The only laws then existing which had references to banking were contained in general provisions of the Spanish civil; code and code of commerce. There were no definite to banking commitments on the part of the government as to its responsibility with respect to the banks and their clients. During this period, there was no significant interest of Filipino capital and initiative in banking.

THE AMERICAN ERA

`Upon the coming of the Americans to the Philippines at the turn of the century, the four banks established during the Spanish regime continued operating. Soon they were joined by branches of the International Banking Corporation (subsequently

absorbed by and operated as a branch of the National City Bank of New York) and the Guaranty Trust Company. The latter branch, however, stayed only a few years. In 1906, the Postal Savings Bank was created as a division of the Bureau of Posts to promote the habit of the thrift among people, particularly the low-income group and those who could not be served by banks in the provinces. Two years later, the government-owned Agricultural Bank was established with a capital of P1 million. It failed to render effective service to the farmers, however, due to its meager capital. Banking business in the Philippines was dominated by foreign interests until the establishment of the Philippine National Bank in 1916 alleviated this situation to some extent. It was capitalized at P20 million which was almost entirely subscribed by the government. It was granted the privileged of note issue. The Philippines National Bank was organized not only to grant short-term loans to merchants but also to long-term credit to agriculture and industry. It absorbed the Agricultural Bank and also expanded its facilities by operating branches, agencies, and sub-agencies in the provinces. In 1934, the Philippines National Bank had to undergo a reorganization and its capital was reduced to P10 million. After World War 1, several banks were established in the Islands. Among them were the Yokohama Specie Bank (1919, the China Banking Corporation (1920), the Peoples Bank and Trust Company (1926), the Mercantile Bank of China (1926). After the establishment of the Commonwealth in 1935, more banks entered the Philippines scene. The Nederlandsch Indische Handelsbank opened a branch in Manila in 1937. In 1938, The Philippines Bank of Commerce, perhaps the first bank with genuine Filipino private capital, was founded. In the same year, the Bank of Taiwan was

granted permission to operate a Manila branch. In 1939, the Philippine Bank of Communications and the Bank of the Commonwealth began commercial banking operations. Likewise, the government-owned Agricultural and Industrial Bank commenced operations that year. Prior to the second World War, The Philippines was serviced by 17 banks with 17 Manila offices, 22 provincial branches, 54 provincial agencies and 1,000 sub-agents. Two of the banks, the Philippine National Bank and the Agricultural and Industrial Bank, were government-owned; seven were domestic banks and trust companies, two were savings and mortgage bank, six were branches of foreign banks. Of the seven domestic banks, two were under the control of the ecclesiastical corporations; two were Chineseowned; two were Filipino-owned and one predominantly of American capitalization. Of the six foreign banks, one was American; two were British; two were Japanese and the one was Dutch. During the period, definite shape were taken to supervise and regulate the business of banking so as to provide a measure of safety to bank depositors and creditors as well as the banks themselves. In 1900, the first Philippine Commission passed Act No. 52 providing for the regular examination and inspection of banks. The Bureau of Banking was created in 1929, transferring the power of supervision over these institutions from the Insular Treasurer of the Bank Commissioner. The following year saw the establishment of the Manila Clearing House. It was organized by the domestic banking corporations, while branches of foreign banks stayed out of the association. An indication of the stability of the business during this period can be found in the fact that

the Philippine territory was exempted by the President of the United States from the observance of the Banking Holiday in March 1933. The second world war wrought havoc on the Philippine banking. During the Japanese occupati0n , only Filipino-owned and Japanese banks were allowed to operate. The southern development bank (nampo kaihatsu kinko) opened a branch in manila in 1942. It acted as fiscal agent of the functions of central bank, issuing military notes, taking custody of the clearing balances of the banks and receiving deposits from the banks. Prior to the Japanese invasion, however, most banks were able to increase substantially their dollar balances in the united states and placed part of their security holding in the U.S. correspondence on a safekeeping basis. Moreover, in December 1941, the united states high commissioner carried into effect a financial scorched earth policy. Over Php.8 million of till cash, clearing house balances of almost Php.20 million and large amounts of securities and other valuables were turned over by the banks to the high commissioner who arranged for their transfer to Corregidor and eventually by submarine to the united states.

THE POSTWAR AND INDEPENDENCE ERA

Liberation found every domestic bank which operated during the Japanese occupation unable to reopen for business. They could not meet their obligation in Philippine currency since great part of their assets consisted of enemy war notes, bonds and obligation of the Japanese-sponsored republic and balances with Japanese banks. The banks had acquired these assets which became worthless as a consequence of the war. The banks turned to the government for aid. Accordingly, the president of the

Philippines issued executive order no.96 invalidating all occupation deposits. War time payments on bank loans with scrip, however, were declared valid by courts. The promulgation on executive order no.48 in June 1945 paved the way for the reopening of pre-war banks. The first license to re open was granted during the same month to the national city bank of new York. The approval of commonwealth act no.726 in January 1945 enabled other domestic banks to reopen for business in march 1946. This act provided a sum of 10 million to rehabilitate domestic banks by investing the funds in preferred shares of the bank. The year 1946 saw the expansion of postal savings bank facilities in cities, provinces and municipalities. On January 2,1947, the rehabilitation finance corporation , created by republic act no. 85, commenced operations. It absorb the government-owned agricultural and industrial bank. It was organized primarily to provide financial aid in the rehabilitation of the warravaged country and to help in the rehab of the war-ravage country and to help in the broadening and in the diversification of the economic structure.

During the same period, a branch of the bank of America was granted a permit to conduct business in manila. Concurrently, the existing bank embarked on an expansion of banking facilities by putting up branches elsewhere in manila and in some provinces. In 1948, the general banking act was passed, providing definite rules and regulations regarding the organizations and operation of banks. The following year, the central bank of the Philippines was inaugurated. The compelling reasons for the establishment of this institution stemmed from two basic problems facing the postwar Philippines. one problem was of adjustment, the transition of a colonial raw material-producing economy

to an agricultural- industrial structure providing a reasonable degree of self-sufficiency that befits a free nation. This task required a monetary system adequate flexible to finance the economic adjustment. The rigid 100 per cent reserve system was abandoned in favor of a managed currency system. The other problem was enlist the resources of the banking system in this major economic endeavor. Bankers generally ran their business independently of each other, without unified action in respect to the effect of their decisions on the general economy. This attitude and practice have no place in a economy struggling for development. Accordingly, the central bank was establish to administer both the monetary and the banking systems.

The industry makes funds available through their lending and investing activities to borrowers individuals, business firms and government. In so doing, they facilitate both the flow of goods and services from producers to consumers and the financial activities of government. They provide a large portion of our medium of exchange, and they are the media through which monetary policy is affected. And they are system of the nation and important to the functioning of our economy

The most significant person that saved the commercial bank industry during the global economic recession is the central banks governor Amando M. Tetangco. He has an A.B economics degree at Ateneo De Manila University, cum laude and M.A in public policy and administration, university of Wisconsin, Madison Wisconsin, USA . He eased monetary policy, let loose credit into productivity sectors, reined in inflation, suspended the crippling market-to-market asset valuation rule, and would be there in case somebody need help.1

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Philippines - Location and size, Population, Services, Retail, Tourism, Communications http://www.nationsencyclopedia.com/economies/Asia-and-thePacific/Philippines.html#ixzz0yxKFa1me Bangko sentral ng pilipinas: Banking in the Philippines Gregorio s. Miranda PHD: Non-commercial banking Irvin Tucker: microeconomics for today Gregorio s. Miranda PHD: Non-commercial banking Irvin Tucker: microeconomics for today BizNews asia vol.7 no.41.

Chapter 2Currently there are 36 commercial and universal banks who are operating in

the Philippines.BANK NAME

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23

BANCO DE ORO UNIBANK INC METROPOLITAN BANK & TCO BANK OF THE PHIL ISLANDS LAND BANK OF THE PHILIPPINES PHIL NATIONAL BANK DEVELOPMENT BANK OF THE PHIL RIZAL COMM'L BANKING CORP UNION BANK OF THE PHILS CHINA BANKING CORP CITIBANK, N.A. ALLIED BANKING CORP UNITED COCONUT PLANTERS BANK SECURITY BANK CORP HONGKONG & SHANGHAI BANKING CORP BANK OF COMMERCE PHIL TRUST COMPANY EAST WEST BANKING CORP STANDARD CHARTERED BANK PHILIPPINE VETERANS BANK PHIL BANK OF COMMUNICATIONS ASIA UNITED BANK CORPORATION DEUTSCHE BANK AG THE BNK OF TOKYO-MITSUBISHI UFJ LTD

24 25 26 27 28 29 30 31 32 33 34 35 36

BDO PRIVATE BANK, INC. MIZUHO CORPORATE BANK LTD-MANILA BR CHINATRUST(PHILS) CBC JP MORGAN CHASE BANK NATIONAL ASSN. MAYBANK PHILIPPINES INC INTERNATIONALE NEDERLANDEN GROEP BK ANZ BANKING GROUP LTD KOREA EXCHANGE BANK MEGA INT'L COMM'L BANK CO LTD BANK OF AMERICA N.A. THE ROYAL BANK OF SCOTLAND (PHILS) BANGKOK BANK PUBLIC CO LTD BANK OF CHINA LIMITED-MANILA BRANCH

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http://www.bsp.gov.ph/banking/universal.asp

The commercial bank industrys total resources rose by 10.1% in the third quarter of 2009. The increase in three months, from June 2009 to September 2009, was 1.75%. the top five banks are: BDO Unibank Inc.(P 808.5billion), Metropolitan Bank and Trust Co. (P 780.9 billion), Bank of the Philippine Island (P 641.09 billion), Land Bank (P 512.9 billion) and Philippine National Bank (P286.4 billion) Metro bank reported the biggest market share in terms of equity at 13.98%. BDO came in second, displacing BPI, whose equity declined by P397.56 million. Return on equity of the industry averaged 8.34%during the quarter. BPIs assets decreased from P695.97 billion from last quarter to P641.10 billion this 2009 3rd quarter. Total investment securities of the commercial banking industry grew by 7.95% from last quarter of June 2009.

The industrys deposit liabilities stood at P4.10 trillion as of end- September 2009, a1.71% and 12.45% rise from the previous quarter and from the same period last year, respectively. Metrobank overlook BPI as the second biggest bank in terms of deposit, after BDO. BPIs deposit decreased by 8.93% from last quarter. Likewise the industrys trust assets continued to expand, recorded at 7.03% from last quarter. BDO maintained its lead in terms of trust assets, accounting for 25.31% of the total trust assets of the industry, followed by BPI at 25.02%. the commercial banking industrys total equity stood at P527.80 billion , up by 5.38%. The U.S-led financial crisis that erupted in 2008 compelled Philippine banks to go back to their basic business, its lending. As a result the commercial banks gross loan portfolio increased by 5.22% to 5.88% during the 3rd quarter of 2009. The battle cry

of the industry is core banking or back to basics, which naturally points to loan portfolio build-up which must be tempered with prudent lending activities. With the challenging environment facing banks, this is the best time for introspection and to rebrand, it is also timely and necessary to strengthen partnership with their consumers, because they are all in this together.3

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The market structure of a commercial bank industry is a MONOPOLISTIC

COMPETITION which characterized by the following: MANY SELLERS because there are 36 firms in the industry, the many-sellers condition is met when each firm is small relative to the total market that its pricing decision have negligible effect on the market price. DIFFERENTIATED PRODUCT because it has close but not perfect substitute with the other firms product, it offers differentiated services and it has some control over price. PRODUCT DIFFERENTIATION, its a process of creating real or apparent differences between goods and services. There are different types bank which offer different types of services, for example Security Bank offers Cash Card that has access to any BancNet outlet with no amount of maintaining balance needed while BDO on the other hand also offers Cash Card that can be used through Circus or Visa but strictly require maintaining balance. According to Irvin tucker, a monopolistic competitive firm is a price maker. The primary reason is that its product is differentiated. This give a monopolistic competitive firm a

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Irvin Tucker: microeconomics for today 3rd edition.

limited control over its price, the loyalty ensures some costumers will remain steadfast.5

The advertisement of each firm gives consumer assurance that their money is at the

right place and believes at the power of the firm to compete and be the best. And the demand curve of a commercial bank is inelastic. The quantity demanded is less responsive to change in price, because even if there is a change in the interest they implement in their transaction consumers will still pursue there services. Brand loyalty ensures the firm that consumers trust their services. Degree of competition in a commercial bank industry. BDO, Metro bank, and BPI are the top 3 banks in the Philippines. A monopolistically competitive firm engages in nonprice competition by using expensive ads to differentiate its product. Instead of raising the deposit liabilities, the firm's goal is to convince customers that its financial services are better from its rival's services. They are frequently running ads that feature lower prices, a higher quality of service or a new product to win customers. The ads proclaim that their product is the best way to maximize their utility. Thats why they are at the top list in the industry. Profit rises when advertising increases t not need, ads also increase price competition among firms. Does monopolistic competition lead to lower prices, greater output and better informed consumers? Or does this market structure simply raise prices and annoy consumers with useless and often misleading information. In some scenario ads mislead consumers with bad information that is not up to the standards of their product. That why some products cant survive in the long run

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Irvin Tucker: microeconomics for today 3rd edition.

because consumers dont believe in the standard of their product. The brand loyalty makes the firm stronger and survives in the long run.6

One advantage of big commercial bank is that the consumers believe that big banks will

not be bankrupt. They think that their money is in the right place and its the best place to invest their money. How about the small firms, how do they survive and compete with the big firms like BDO, Metrobank and BPI? One disadvantage of using a large, commercial bank can easily be seen if you're trying to get a loan. Unlike a local bank, or a relatively small bank, a larger, commercial bank will have to put a loan through several different departments. Beyond that, you may have to have dozens of people sign off on a single loan. This can lead to many more people getting involved in saying yes or no to your loan, and it may lead to a lot more negotiation than you were hoping to conduct. This is especially true for a simple, relatively straightforward home or business loan. Small banks has a simpler way of attracting consumers, and some small banks cant even afford an advertisement because they are keeping a tight budget. So keeping simpler ways helps small firms to survive and compete with other firms.

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THE THREE FUNDAMENTAL ECONOMIC QUESTIONS

WHAT TO PRODUCE?

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Irvin Tucker: microeconomics for today 3rd edition.7

Irvin Tucker: microeconomics for today 3rd edition.

Commercial bank industry produces a service typed product. Loans are their primary product, the interest they earn from their loans are the typed of service they produce. Their income comes from their eared interest. HOW TO PRODUCE? Educations plays an important role in answering the how question. Education improves the ability of workers to perform their work. They need professionals like accountant, lawyers, financial analyst and economist. These professionals improve the services they give to the consumers. FOR WHOM TO PRODUCE? The for whom question means that society must have a method to decide who will be rich and famous and who will be poor and unknown. The rich and middle class are the one who consume the services of the banks. They know that their best costumer is the big names with big business, that are creating jobs for people to depend on. The total opportunity cost of a firm is the sum of explicit cost and Implicit cost. Explicit cost includes the wages paid to labor, the rental charges for a plant, the cost of electricity and the materials use in the business. The banking industry pays many laborers for their work, buys many machine for their operation and pay many expenses to run the firm. Implicit cost is when a person uses his own money or resourses to operate his business

Chapter 3

Public attitude towards banking, the general public is composed of potential savers, investors and borrowers upon whom banking thrives. The character, Habits, and customs of the general public, therefore , affect and determine to some extent the development and success of banking. Limited use of banking facilities, the general public had a different attitude towards savings and banking facilities. Banking habits are not widespread among the people. The use of savings accounts is not prevalent especially in the provinces as evidenced by the concentration of the deposits in manila and urban areas. For most people, savings take the form of cash hoards or investments in real estate and jewellery. Because of the limited use of banking and credit, the use of checks as a means of payment is n0t a common practice. Absence of organised money and capital market, A major obstacle to the efficient use of monetary instruments of control is the absence of an organized and integrated money and capital market. Trading on commercial paper has been limited to those credit instruments related to foreign trade financing which is largely concentrated in the urban areas. Moreover, the market for government securities operates mainly on an institutional level. Government bonds and treasury bills find their way mainly to the central bank and the government-owned Philippine national bank. Increased public borrowing, The increasing trend of public borrowing to finance development projects of the government constitutes another factor that hampers the efficacy of money controls. Motivated by the strong desire to accelerate economic development, the government relies heavily on central bank credit. As a result, borrowings from the banking system and fr0m abroad greatly exceed the funds obtained

from taxes, borrowing from private entities and other non-inflationary sources. This dependence of the government on central bank credit has, therefore, created complementary problems in the fiscal area that impair the efficacy of control on the supply of money and credit.

The biggest problem that the commercial banking industry faced is the global economic recession last 2009. The industry thought that the Global Economic Recession will affect export and investment that depends largely on world demand. This resulted to lose of resources for business people to be capable of getting and paying loans from banks. And since businesses shut down, people lost their jobs which also made them incapable of getting and paying loans. It is a chain effect on every aspect of life.

Two heroes saved the Philippines from the precipice of a recession in 2009. The first is the Filipino expat. There are ten million overseas contract workers (OCWs). Together, they remitted at least $17 billion in 2009. At that time the dollar cost P47.7 , the $17 billion is equivalent to P811 billion, which in turn propelled the phenomenal growth of malls and other services, the commercial bank industry dominates the remittance business that offers easy dollar account for consumers working aboard. Second was the stability of commercial bank with the help of BSP. The BSP was a big factor in preventing a recession, they revised market-to-market policies which help banks avert huge paper loses which could have caused a systematic shock similar to the U.S. the market values of securities returned to stabilized level within three months.

That policy preserve capital and liquidity levels of banks. Also they lowered the reserve requirement on banks deposits by 2%. By the third quarter of 2009 thus, the philippine Commercial banking system was in better shape than it was when the global financial crisis began. It expanded its resources, regained its lending pace, values of the financial assets that the amount of assets available for sale declined, return to huge profitability and much sounder stability.8

Banking LawsR.A. No. Date Description

P.D. 114 P.D. 129 P.D. 1034 R.A. 3591, as amended

29 Jan 1973 15 Feb 1973 30 Sep 1976

Regulating the establishment and operation of pawnshops Governing the establishment, operation and regulation of Investment Houses Authorizing the establishment of an offshore banking system in the Philippines An act establishing the Philippine Deposit Insurance Corporation (PDIC Charter)

02 R.A.7353 April 1992 R.A. 7653 10 Jun 1993 18 R.A. 7721 May 1994 R.A. 7906 R.A. 8367 R.A. 8556 R.A. 8791 1995 21 Oct 1997 1998

An Act Providing for the Creation, Organization and Operation of Rural Banks, and For Other Purposes The New Central Bank Act An Act liberalizing the entry and scope of operations of foreign banks in the Philippines and for other purposes

23 Feb An Act providing for the regulation of the organization and operation of Thrift Banks, and for other purposes Revised Non-Stock Savings and Loan Association Act of 1997

26 Feb An Act amending R.A. 5980, as amended, otherwise known as the Financing Companu Act 12 Apr General Banking Law of 2000, an act providing for the regulation of the

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2000 R.A. 9160 R.A. 9178 29 Sep 2001 2002 18 Dec 2002 19 Mar 2003

organization and operations of banks, quasi-banks, trust entities and for other purposes Anti-Money Laundering Act of 2001

13 Nov An Act to promote the establishment of Barangay Micro Business Enterprises (BMBEs), providing incentives and benefits therefor, and for other purposes An act granting tax exemptions and fee privileges to special purpose vehicles which acquire or invest in non-performing assets, setting the regulatory framework therefore, and for other purposes Implementing Rules and Regulations of R.A. 9182

R.A. 9182 R.A. 9182 IRR R.A. 9194 R.A. 9194 IRR

07 Mar An act amending Republic Act No. 9160, otherwise known as the "Anti-Money 2003 Laundering Act of 2001" 06 Aug 2003 Implementing Rules and Regulations of R.A. 9194 An Act amending certain sections of the National Internal Revenue Code of

R.A. 9238

5 Feb 2004

1997, as amended, by excluding several services from the coverage of the value-added tax and re-imposing the gross receipts tax on banks and nonbank financial intermediaries performing quasi-banking functions and other non-bank financial intermediaries beginning January 01, 2004 An Act restoring the tax exemption of OBUs and FCDUs, amending for the purpose Section 27 (D) and Section 28, Paragraphs (A) (4) and (A) (7) (b) of the National Internal Revenue Code as amended. Equity and Retirement Account (PERA) Implementing Rules and Regulations of R.A. 9505

R.A. 9294

28 Apr 2004

R.A. 9505 R.A. 9505 IRR9

22 Aug An Act Establishing a Provident Personal Savings Plan, known as the Personal 2008 21 Oct 2009

Loans and Credit Operations Rediscounting Rediscounting is a standing credit facility provided by the BSP to help banks meet temporary liquidity needs by refinancing the loans they extend to their clients. Through the facility, the BSP also makes possible the timely delivery of credit to all productive9

http://www.bsp.gov.ph/regulations/laws.asp

sectors of the economy. Moreover, rediscounting is one of the monetary tools of the BSP to regulate the level of liquidity in the financial system. The BSPs rediscounting is administered by the Department of Loans and Credit.

Overdraft Credit Line The BSP also makes available an overdraft credit line (OCL) to banks participating directly in the clearing operations of the Philippine Clearing House Corporation to cover shortfalls in the banks' demand deposit account with the BSP arising from clearing operations. Effective 01 January 2011, the BSP will impose a ceiling on the amount of overdraft a bank may incur due to failure to cover clearing losses through interbank borrowings and/or repurchase agreements with BSP. The ceiling is defined as the sum of clean OCL equivalent to 15% of rediscounting line with the BSP, and the collateralized OCL that will be extended by the BSP. Banks may apply for collateralized OCL in an amount equivalent to at least 5% of their demand deposit liabilities as of end of month, two months prior to the date of application with the Department of Loans and Credit, BSP.

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Emergency Loans

The BSP also extends financial assistance to banking institutions in the form of fully secured liquidity (emergency) loans as a temporary remedial measure to help solvent banks overcome their liquidity problems arising from causes beyond their control, pursuant to Section 84 of R.A. No. 7653. The maximum assistance shall be limited to

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http://www.bsp.gov.ph/regulations/laws.asp

the amount needed by the applicant bank to overcome the emergency or financial

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predicament but shall not exceed 50% of its outstanding deposits and provided that any emergency advance should be collateralized by first-class collateral (primarily real estate). Since the bank industry is the biggest remittance business, I think that they should improve their ads and raise the deposits interest so they can attract more consumers to peruse their services. They dominated the international remittance business but not the domestic remittance business, because there are alternative ways of transferring your money. Their biggest competitors are the easy money transfer like LBC; it offers chipper and easier way of remitting money to the consumers. The other competitor of banks is the pawnshop, they can be great substitute for a bank loan and you dont have to sign and fill up many papers. The exchange of things for money is the type of service they give. Nowadays, with our economic and globally problems more people are willing to go to alternative and easier way of getting a loan. Pawnshops offers easy payment and low interest rate for an average employee they would rather prefer this than a loan in a commercial bank.

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