Jakarta. Many Indonesians have picked pawning to gain cash amidst economic uncertainty.

For over 124 years, Pegadaian has offered pawn services as a financing services. Pegadaian also considered it a "lifeline" of liquidity for many households as well as micro, small and medium enterprises (MSMEs). 

A market trader needs additional capital for tomorrow's stock, or a parent facing a sudden educational need, and doesn't have time to wait for a loan approval process that can take days.

This is the experience of Lia (33), a tea shop owner and mother of one, who is currently busy finding the best school for her child in Jakarta. The increasing cost of living and the rising cost of school didn't immediately make Lia panic, as she had been actively investing in gold since 2015.

"Since 2015, I started buying gold bars when I had extra money, and gradually started saving gold at Pegadaian. This habit continued until I got married and had children. If I needed emergency funds, I could pawn the gold I owned and pay it off when I had the money. I could still meet my needs without losing my investment," Lia said.

Lia also admitted that she never imagined the investment she had slowly accumulated would be worth as much as it is now.

"I actually didn't expect the increase in gold prices to be this significant. Besides calculating funds for my children's school, my husband and I were also starting to think about opening another small outlet using our gold as collateral," Lia added.

At Pegadaian, people can bring valuable assets such as gold, jewelry, or electronic goods and receive cash in a matter of minutes. This speed prevents people from falling into the trap of illegal loans or loan sharks, who strangle them with high interest rates.

"Pawning is certainly a flagship product that we hope will help the community's economy. If people need cash, they can immediately pawn their belongings, such as gold, household appliances, and electronics, and pay them off later, without having to lose their assets," Selfie Dewiyanti, the director for marketing, sales, and product development at Pegadaian, was quoted as saying in a press statement.

Pegadaian's pawn services start with loans of Rp 50,000 ($2.98) to make it inclusive for all groups.

"This money can be used for daily needs or as business capital for MSMEs," said Selfie.

MSMEs have become the backbone of the Indonesian economy. However, a classic obstacle they face is access to working capital. This is where Pegadaian plays a strategic role. Many businesses use the pawn scheme as "revolving capital." Pegadaian even regularly holds the "Gadai Peduli" program, a 0% interest or interest-free pawn service, with loans ranging from Rp 50,000 to Rp 2.5 million.

Gold was chosen for its stable value and safe haven. By pawning gold, businesses obtain working capital without losing their investment assets. Once the business generates a profit, they redeem the gold. This cycle creates sustainable financial independence, where assets are not sold but can still productively generate capital.

Pegadaian has also made some digital transformation initiatives through the Tring! app. This app allows people to pawn easily without having to queue at branch offices. Gadai Gold Savings are also available on the app, enabling people to pawn their digital gold balances instantly.

"More and more people are realizing that gold is a safe and liquid investment instrument. This is evident in the public's enthusiasm for buying gold, not only physical gold but also in the form of Gold Savings accounts. At Pegadaian, people can save, pawn, and deposit their gold balances easily, saving time, anywhere and anytime through the Tring! app. Now, people of all backgrounds and ages find it easier to transact and invest at Pegadaian," Selfie said.

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