- The lack of financing due to the lack of liquidity strangles families and SMEs.
- The need for alternatives has increased the activity of the mountains of piety, based on the so-called pledge loans.
- These are loans granted on the spot in exchange for personal jewelry that can then be recovered by canceling the loan.
The lack of financing due to the shortage of credit continues to be entrenched as one of the main problems of the crisis, which is suffocating families and small and medium enterprises. The president of the Government, Mariano Rajoy, recognized just a few weeks ago that the evolution of credit in Spain is “still very unsatisfactory”, and urged financial institutions to “be up to the circumstances” to grant it to those people that they have done “good things, comply and have the right” to finance their projects.
Meanwhile, the need for alternatives to the lack of liquidity has turned the mountains of piety into a resource increasingly used by those who need to deal with transitory needs. Born in the fifteenth century in Italy and germ of the disappeared Savings Banks, the mountains of piety are based on what is called pledge loans. That is, they are granted with the sole guarantee of the pledge, which in this case are jewels, and depending on their value. These jewels are deposited until the cancellation of said loan.
This model is gaining momentum because many people are staying out of the credit system “Their sense is that people jewelery can find liquidity when already you have exhausted all other avenues or very difficult to access them. It’s a chattel loan, but not bleeding and eliminates the usury of the ‘Buy Gold’ ‘, says Pau A. Montserrat, chief economist at iahorro.com.
Although since the beginning of the crisis the number of mounts of piety has been reduced as a result of the process of consolidation of the entities that make up the sector, more and more is being used. In 2007 the number of active pledge forests was 21 and today they have activity 14, while the number of entities has gone from 45 in December 2009 to 14 groups today.
“What has increased is the number of people who have to resort to this procedure, their way of working is less aggressive towards the client”, says Fernando Herrero, spokesman of the Board of the Association of Users, Savings Banks and Insurance (ADICAE) .
The process is simple and fast. The minimum amount that can be requested is € 300. In the Monte de Piedad, the immediate valuation of the pieces is proceeded, according to which the maximum amount of the loan is calculated, which is paid in cash on the spot. The customer can recover their belongings at any time or when the expiration date, after cancellation of the loan, or request a renewal of another year that is usually granted if a minimum capital is amortized.
La Caixa is one of those that is betting in this way and has opened its fourth branch in Madrid, after Barcelona, Seville and Tenerife. “This model is gaining strength because many people are staying out of the credit system and the social microloans that we offer are the only way to finance themselves, ” explains Delfín Martín, Director of the Madrid office. “For many people, it’s their only lifeline,” he adds.
More social alternative
“In principle, it is a more social alternative, if prices are offered above the market, of course, it is to return a little to the origins of the Savings Banks that should not have been forgotten,” says Pau. And will not Montes de Piedad be a rescued formula to improve the image of the financial sector? “It’s likely, maybe it does, but if it gets to benefit someone who is in trouble, that’s secondary.”
It is an option for people who do not have another Delfín Martín denies, flatly, the face-lift: “No and no.” In Microbank, which manages Monte de Piedad de La Caixa, which has 30,000 clients and a portfolio of 43,000 microcredits. for a total amount of 58 million euros – we have been giving microcredits of this type for more than ten years, it is an option for people who do not have any other, only the DNI or the residence card is necessary “.
“With the liquidation of the Savings Banks, the Montes de Piedad have remained like the traditional pawnshops in which anyone can go to wear a family jewel or grandfather’s watch with the hope of recovering it when the situation improves,” says Herrero .
At the end of 2012, 14 Montes de Piedad were computed in Spain with La Caixa activity, Caja Granada, Unicaja, Ibercaja, CajAstur, Sa Nostra, Caja de Canarias, Caja Cantabria, Caja Círculo, Caja España – Duero, Caja Madrid, Badajoz , Nova Caixa Galicia and Bancaja.