The Impact of Pawnbroking on Local Communities with special reference to Bangladesh

Author:José G. Vargas-Hernández, Amina Khatun, Csongor Czipf, Absalón J. Salmerón-Zapata

Abstract:
This study examines pawnbroking's impact on social entrepreneurship and its implications for social development. It posits that Pawnbroking aids vulnerable entrepreneurs, often excluded from formal credit, in accessing quick financial resources, thereby enhancing social entrepreneurship. Through a meta-analysis and literature review, including three case studies from Bangladesh, the findings indicate that, despite exploitative practices, pawnshops are vital for providing the impoverished with financial access and supporting social welfare. However, risks such as asset loss, debt cycles, and exploitation of desperate borrowers are also highlighted. The study emphasizes the need for regulatory oversight and more accessible financial systems that protect borrowers while maintaining accessibility. Overall, pawnbroking offers both advantages and challenges for local communities in Bangladesh, necessitating a balance between quick cash access and consumer protections to promote healthier community dynamics.

Keywords:Credit, Pawnbroking, Social Entrepreneurship, Debt Cycles, Borrowers, Loan.

DOI:10.46333/ijtc/14/1/20

International Journal of Trade & Commerce (Vol: 14 Issue:1)