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Indonesians feel at ease with the pawn system, as they
should. The industry has existed here a long time, as in the West,
where it could be found in the Greek and Roman empires.
While the British were running the Dutch East Indies in the early 19th
century, Governor Stamford Raffles liquidated the Bank van Leening and
reversed a law banning pawnshops.
The Dutch bank had a credit system that allowed the short-term pawning
of goods, mainly gold, silver and fabrics.
Raffles, a free marketer and the founder of Singapore, opened the pawn
business to everyone, though shops required a license.
The Dutch returned to power in 1816 and did not approve of Raffles'
reforms. It took until 1901 to close private operators and create the
government monopoly that remains today.
Though not for much longer. Next year the pawn industry could see the
return of Raffles' rules. If bankers plan to use the law change to
muscle their way into the industry, then beware, Pegadaian may be a
government outfit, but it is no pushover.
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