Pocketbook Loans: An Amazing and True Tale of Gucci as Collateral
I read, with more-than-usual interest and lots of glee, a story last week in The Wall Street Journal (“Cash Is in the Bag, if It’s Gucci,” Aug 14) about a relatively new form of lending in Hong Kong. Let’s call it (because the WSJ did) “handbag-backed loans,” where women, I assume, are using their designer bags as collateral for quick cash. They do this to buy more handbags, I assume again. Finance never ceases to amaze, high or high end. It gets better. The lending company goes by the name of Yes Lady Finance, a four-year-old operation that accepts purses “on the spot,” which are vetted for authenticity by assessors. (Wait, that could be a new profession – the ultimate bag-check checker!) The borrower can get up to 80% of the value of the handbag within 30 minutes at a MONTHLY rate of 4 percent.
In typical Journal fashion, we then read about the popularity of non-regulated lenders and the Pawnbrokers Ordinance, the high number of luxury handbags stores in the SAR, and that yes, the money, is used for some serious things (my second assumption was wrong) like food and tuition for one woman’s five-year-old son, as well as the plight of one woman with too many “idle handbags at home.” Some even leverage the handbags to buy stocks. A perfect story all around that was relevant (credit crunch), included anecdotes (lots of clutch drama) and even some data points.
Should I be afraid of the next crime wave? “Empty out your purse and hand over the Prada and no one gets hurt.”