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First Cash Pawn Shops are based out
of Arlington, Texas, and the company has over 200 locations (about 50 of
which are in Mexico). In
Mexico, pawn shops are a principal lending source, whether long or
short-term loans. First Cash
Pawn Shops are considerably larger in Mexico due to the necessity of the
lending need, offering payday loans to residents.
Most consumers in Mexico do not
have checking accounts and deal with pawn shops daily for short-term loans
and merchandise purchases. First
Cash Pawn Shops are in direct competition with Nacional Monte de Piedad,
the largest pawn shop chain in Mexico, which is owned by the government
and offers similar payday loans. However,
with fewer licensing requirements, zoning restrictions, and competitors,
the short-term loan industry proves to be extremely profitable for First
Cash Pawn Shops in Mexico.
Most stores offering payday loans
are located along the border, although several locations are as far south
as Monterrey (150 miles south of Laredo, Texas).
The short-term loan provider’s stock went up more than 180% in
2003 alone, as the short-term loan is becoming more and more sought after.
Short-term loans are popular among
those who need quick cash or would not be approved for a loan should their
credit be checked. Any item
of value can be used as collateral for a short-term loan, which usually
requires repayment within a period of 30-90 days.
Short-term loans are often needed for unexpected bills, such as car
repairs or medical bills.
Although First Cash Pawn Shops in America are
still making a substantial profit, and Rick Wessel (President of First
Cash Pawn) does not expect business of payday loans north of the border to
slow anytime soon, the company plans to move more into the Mexican market
as part of its strategy to prevent loss, should the economy cause problems
for pawn shops.
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