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Mexico’s pawn culture kicks in around the holidays

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Ester Ruiz Ramirez, 56, stood in line for hours in downtown Mexico City Wednesday to hock a ring and some earrings given to her by her children.

“I need the money to pay for my grandchild’s school fees,” she said.

Ramirez is one of an expected 800,000 people who will turn to el Nacional Monte de Piedad in January -- one of the institution’s busiest months -- to borrow small amounts of cash against personal items. The money is mostly to cover expenses.

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El Monte, as it’s known, is Mexico’s largest nonprofit pawnshop. It has more than 150 branches across the country and charges relatively low rates of interest to Mexicans who aren’t able to get bank loans or credit cards. As Marla Dickerson reported in 2005, for millions of Mexicans, it’s the only credit available to them.

“In Mexico, there’s a culture of borrowing,” said Gustavo Mendez Tapia, a spokesperson for El Monte.

“Grandfathers taught their sons, their sons taught the new generation, that those people who don’t have the ability to turn to a bank or other financial institution, they come to us and their guarantee is the item that they bring to borrow against.”

The culture of pawning was brought to Mexico by the Spanish conquistadors, who in turn had followed the example of the Italians. The first Monte de Piedad was founded in Perugia, Italy, in 1450 and arrived in Madrid in 1702. Spanish-born silver baron Don Pedro Romero de Terreros founded Mexico’s first branch in 1775.

On Wednesday afternoon, young mothers nursing babies, leathery-skinned old men reading books to pass the time and adolescent boys all stood in line beneath the arches of El Monte’s national headquarters on Mexico City’s Avenida Cinco de Mayo.

All of them had something to trade, and the worth of their precious things was decided in a matter of seconds by the line of clerks sitting behind counters and shielded by thick glass windows.

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Of the 24 million transactions that Mendez Tapia expects El Monte to make this year, 96% of them will be reclaimed by their owners within the 17-month window they’re given.

“People don’t just bring a ring or a watch -- everything has a meaning, a story, behind it.” said Mendez Tapia. It could be a watch given by a father before his death, “so they don’t want just any watch, they want that watch or the loving promise someone gave them.”

Ramirez said that she got a decent price for her ring and earrings. “It was a good price for me. Had they given me more, I might not be able to buy them back,” she said.

-- Deborah Bonello in Mexico City

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