In the west, pawnbroking existed in the Ancient Greek and Roman Empires. Most contemporary Western law on the subject is derived from the Roman jurisprudence. As the empire spread its culture, pawnbroking went with it. Likewise, in the East, the business model existed in China 3000 years ago no different from today, through the ages strictly regulated by Imperial or other authorities.
During the late Middle Ages the House of Lombard in Europe had a group of Pawn shops. The sign of the House of Lombard was *three golden spheress and the sign was associated for years with the pawn industry.
The first places in the U.S. to identify themselves as pawnshops —usually marked by the same sign showing three spheres— were established in the second decade of the 19th century. The number of pawnshops dotting urban landscapes only increased, thanks to the growth of the domestic manufacturing sector, which generally paid its workforce low wages. A pawnshop loan could be a crucial bridge between paydays, providing cash for basic necessities such as food and rent on the security of personal possessions.
In the past 100 years, the number of pawn shops has skyrocketed in the United States. During the Great Depression era, pawn shops were among the only institutions offering cash as banks failed and people were forced to give up their cherished items to make ends meet. Today, whether in big cities and small towns, pawn shops are still a primary place people can go to turn their items into cash. These shops operate as mini-banks for millions of Americans who do not hold checking accounts, and they also serve as an area of exchange for people of all class backgrounds to buy and sell unique, rare or coveted items.
Pawnshop loans were so essential to so many that there was one item in pawn for every man, woman and child living in New York City in the year 1828 alone.
With the rise of large consumer institutions, such as finance corporations, savings and loan associations and credit unions, the pawn shop is no longer the major source of consumer credit – although they still plays a vital role in providing consumer credit.
Sometimes the general public needs to borrow small sums of money that other sources are not willing to provide them and this resulted in the rise of popularity of pawn shops. What chance do you think you would have in securing a $300.00 or smaller loan from financial institution for a 30 to 90 days period? The cost of the paperwork alone prohibits them from making such loans on a regular basis.