Pawn shop CashWiz looks to New Kingston for fifth store
CashWiz Jamaica has its eye on the New Kingston business district area for its fifth store but is eventually planning to grow to at least 12 locations nationwide.
The company spent roughly US$1 million to build out its current stores in Montego Bay, Mandeville, Clarendon, and Kingston and will spend another US$250,000 to set up its New Kingston operation, said country manager Rick Lowie.
The investment includes working capital and the build-out of stores that operate from leased space, the pawnbroker said.
The company, which originally began in Turks and Caicos Islands in 2008, came under the ownership of Orlando-based CashWiz Holdings Limited in January. Previously, the entity was owned by a company called Byzantium Limited, out of Grand Cayman, Lowie said.
The deal closed about a week or two ago, Lowie said, with the new parent craving major expansion "especially here in Jamaica".
"We see the future of Jamaica having at least 12 stores, if not more," he said.
Main towns such as Spanish Town, Ocho Rios, and Savanna-la-Mar are also targets under the expansion plans, and another store is planned for Montego Bay, since there is "room for growth" there, Lowie said.
However: "There is no definite time stamp on anything. As soon as they say go, we go," he added.
Twenty-five people are employed across the four stores, with another six to be added when the New Kingston store gets off the ground.
The pawn shop entered Jamaica and opened its first store in Montego Bay in 2010, followed by its May Pen and Mandeville outlets a year later. The Half-Way Tree Road, Kingston, store was added in 2012.
CashWiz operates as a micro lender. Its customers hawk their valuables for short-term loans, for which they are charged interest ranging from 10 per cent to 25 per cent, depending on the length of the loan, which may be seven, 10, or 30 days.
The pawned item acts as collateral for the loan. Customers retrieve their possessions when the loans are cleared, but if they default, CashWiz will sell the item to recover the loan.
Lowie said Jamaicans have the lowest rates of default in all of the 12 territories in which the company operates.
"When we average the four stores here in Jamaica, the redemption rate is an average of 70 per cent," he said, adding that the 30 per cent resale rate is consistent with pawn shop operations globally.
The resale price for pawned items is usually more than the valuation CashWiz agreed on with customers.
"Nobody would be in the pawn business if they didn't sell to get back more money. We don't evaluate it [the pawned item] at 100 per cent of what the resale market is," he said.