Select Page

China’s tight credit environment has fostered some interesting financial innovation. In some cities, stacks of wool can be traded for an apartment. Amid this desperate demand for capital even pawnshops, a traditional lending channel, are changing how they operate.

Labelled as capitalist “bloodsuckers” by the Communist Party, pawnshops were banned in China from 1956 to 1987. Upon their return they were mostly frequented by people struggling to make ends meet who would pawn a family heirloom or other household item for a quick loan. In the past decade their role has expanded to provide capital to hard-pressed small businesses.

Full article here