It is in a context of crisis and inflation that the Crédit municipal de Nancy (Meurthe-et-Moselle) has decided to increase the ceiling on its interest-free pledged loans. From 30 to 100 euros.
“Overall, we are seeing an increase in the number and quantity of pawnbrokers granted this year“, says Michel Côme, dDirector of Municipal credit of Nancy. In this period of economic crisis, Crédit municipal is “eager to support those most in need, in the context of current inflation” and has thus decided to increase the limit of its interest-free loans. From 30 to 100 euros, from 1and January 2023, and permanently.
“There are some people who arrive with small items, with a high percentage of loans around 100 euros (8%)emphasizes the director. These loans are obtained to meet daily needs such as shopping, paying bills or refueling, for example.“
This free interest is not new, as there is already up to 30 euros. “This amount did not take into account inflation or the price of gold. It is in this dual context that we have decided to increase the ceiling“, explains Michel Côme. This therefore means that for a pledged loan of 100 euros, there is therefore free interest. This free interest will be limited to a maximum contract per person, non-extendable and non-renewable contract. It will not apply to contracts intended to a sale requested by the depositor.
100 euros, a random number, but not entirely. “You always have to set a threshold. We made the calculation with the evolution of inflation from the place of the measure to 30 euros. Then, 100 euros is a more psychological threshold.”
How does the pawn shop work? It’s very simple. It is a loan obtained against the temporary deposit of a valuable object, which is then evaluated by an auctioneer. The loan is then released immediately, depending on the value of the deposited item. “Three-quarters of the time the deposited items are in gold. To give you an idea, today a gram of 18-karat gold costs 24 euros. So a 4 gram ring corresponds to a loan of 100 euros“explains the director.
Resorting to the pawnshop has a twofold interest, explains the director of the Municipal Credit. First, the loan is immediate. Thus, the person is not required to wait the six months to repay the sum and recover his valuables.
