Handbag-Backed Loans

Need a loan but don't have real estate as collateral? Not a problem for cash-strapped people in Hong Kong, as long as they've got luxury handbags!

Hong Kong's Yes Lady pawnshop is a lender unlike any other:

The four-year-old company accepts handbags on the spot, assesses them for their condition and authenticity and then procures loans within half an hour, as long as the bags are Gucci, Chanel, Hermès or Louis Vuitton. Occasionally, they'll consider a Prada.

In a city driven by consumers' voracious appetite for the newest and latest luxury products, handbag-driven loans are a lucrative business. Yes Lady takes a purse and lends clients 80% of the bag's value. Customers get the bag back by repaying the same loan with 4% monthly interest, within four months. Classic purses and special-edition handbags often retain much of their retail price.

Riva Gold and Chester Yung of The Wall Street Journal has the full story.


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