Hong Kong Women Are Using Their Purses As Loan Collateral
Residents prefer pawning their Pradas to nonbank lenders who have more versatility in terms of loan size and type of collateral than regulated banks.
One company, "Yes Lady," can get you a loan in 30 minutes at 80% of the bag's value, "as long as it is from Gucci, Chanel, Hermès or Louis Vuitton," according to the Journal.
Here's how it's done:
A customer gets her bag back by repaying the loan at 4% monthly interest within four months. Yes Lady says almost all its clients quickly pay off their loans and reclaim their bags.
The company recently lent about US$20,600 in exchange for a Hermès Birkin bag, but Yes Lady's purse-backed loans start at about US$200.
One client brought in 40 to 50 Gucci purses at one time and received a $38,000 loan, according to the report.
Yes Lady brings in assessors to check purses' authenticity, and if it's a fake, "We don't tell them we know," the company's manager told the Journal. "We just say we can't approve the loan."