Financial management of both governmental and private pawnshop business intimately affects the lives of those who depend on pawnshops for cash on a regular or intermittent basis - in particular the middle and low income families which constitute the majority of Thailand’s population. This study intends to analyze the effects of typical pawnshop financial management on total costs and income, as well as to draw conclusion and recommendations to improve the financial management of both governmental and private pawnshops. This paper focuses on the study of historical background and evolution of governmental and private pawnshops ; sources and uses of capital ; the selling of default pawned assets ; pawnshop’s income from interests charged and sale of default pawned assets ; statistical data on pawning ; redemption of' pawned assets ; accounting methods ; the administration of pawnshop business under imposing laws and regulations and rules & regulations of Pawnshop Trade Association. Research methodology involves study on Pawnshop Acts, ratified in B.C. 2505 & ( second edition ) in B.C. 2517, and the Regulations of the Ministry of Finance resulting from the pawnshop Acts ; consultation with employees of both governmental and private pawnshops, as well as em¬ployees of the Pawnshop Trade Association to find out the principles, rules & regulations, and operation of the general pawnshop business ; analysis and comparison of sources and uses of capital from financial statements of governmental and private pawnshops. From the study, it may be concluded the principal income of pawn¬shops is derived from interest received from pawning, while income from the sales of default pawned assets is secondary. The sources of fund for governmental pawnshop are from capital, while sources of fund for private pawnshop are from bank borrowings Uses of fund for both govern¬mental and private pawnshop are primarily for pawned assets. Holding cash on hand and depositing cash in banks for interest constitute a minor portion of the total assets. The major problem in operating a pawnshop is the search for funds at the lowest cost. At present, the market rate of interest for bank borrowing has increased to 15-18% p.a. cousing the cost of operating a pawnshop to increase accordingly. On the other hand, the rate of interest charged for pawned assets is limited by the Pawnshop Act of B.C. 2505. Therefore, in order to allow pawnshops to obtain reasonable return on investment, permitted rate of interest to be charged for pawned assets should be increased in accordance with the increase in the prevailing market rate of interest for bank borrowings.
