THE largely empty shelves and relative quiet yesterday in Cash-U-Up, a pawn shop at PGCT Center on Phnom Penh’s Street 274, betrays what has become a thriving business in the few short months since it first opened.

Between last August and now, the company has managed to grow its loan portfolio to US$1 million, and management is shooting for between $3 million and $4 million by the end of 2011.

Those are strong numbers for an industry that became licensed in Cambodia only in 2010. Cash-U-Up was the fourth pawn shop to be licensed in the Kingdom.

Cash-U-Up seems to have capitalised on the Kingdom’s need for pawn services that operate in a regulated environment, but management insists that profit is not its top priority.

“We don’t think it is the major driver that motivated us to operate the business,” said Puthkiry Kim, Chief Executive Officer of Cash-U-Up owner, Vestal Holdings.

“To help the economy as a whole, to help the low-income people in Cambodia” is the company’s goal.

Altruism aside, the numbers don’t lie. There is money to be made in the legal pawn industry, money enough to possibly lure unlicensed shops out of the shadows.

That, along with a general discouragement of trading in stolen goods, was the goal when a law was passed back in January of last year demanding that all pawn shops be licensed, the government has said.

Cash-U-Up is a joint venture between Singaporean investor Steven Lam and Cambodia-based Vestal Holdings, which operates a wide variety of businesses in the Kingdom. Its primary function is to loan smaller amounts of money to customers in return for holding collateral of some sort, whether electronics, jewellery, motorbikes or cars, though the shop is licensed to sell  the items once people renege on their loans.

People trade valuable goods for temporary credit and later reclaim their possessions when they’ve raised the initial loan amount – plus interest – for Cash-U-Up. Largely, these are people who may not have access to bank or other kinds of financing.

As Cash-U-Up Operations Manager Vong Tith Phearoka said, “Most of our customers are simple people.”

Still, that hasn’t prevented him from loaning large sums of cash. The law states that pawn shops loans are capped at 20 percent of a company’s capital investment. Given that Cash-U-Up started with $500,000, that means Vong Tith Phearoka can hand out as much as $100,000 to borrowers. And he said he has.

Faced with competition from unregulated shops, Puthkiry Kim said two important things keep customers coming through his doors: a low interest rate and the promise of security.

Cash-U-Up offers loans at 2 percent to 3 percent, depending on the client, while illegal pawn brokers might ask for 4 percent or more.

And Operations Manager Vong Tith Phearoka emphasized the pains his company goes through to guarantee the collateral being offered is not stolen.

He offers the same guarantee that borrowers’ belongings will remain safe until they return for them.

For Hak Mony, that was a selling point. The 28-year-old graduate of the National University of Business has no full-time job.

Instead he works as a part-time researcher, which doesn’t pay enough to cover his living expenses. As a result, he was forced to pawn his motorbike for $800 at a 3-percent interest rate. He plans to reclaim the bike before Khmer New Year, though, and knows that he can trust Cash-U-Up to hold it.

“Confidence is very important for the pawn company. We put [our valuables] here because they can keep our things very well and with safety and security.”

“Just pay the money back, and you can take it back.”

Cash-U-Up hopes to expand through an “associate programme” that would pay people who referred business to the company. They are looking to recruit everyone from students to even other pawn brokers to participate.

The company also planned to add locations in Phnom Penh, CEO Puthkiry Kim said, before moving on to Battambang and Siem Reap provinces.