Classic handbags like this Chanel one are being used as collateral for short-term loans in Hong Kong. Picture: Supplied. Source: News Limited
Hermes Birkin bags can be worth more than $20,000. Source: News Limited
A LENDING company has carved out a niche among Hong Kong's super-rich, loaning thousands of dollars to local women using their designer arm-candy as collateral.
Yes Lady Finance Co, which translates to 'rich woman' in Cantonese, will lend up to 80 per cent of the value of handbags, providing they are authentic Gucci, Chanel, Hermes, Louis Vuitton or Prada, The Wall St Journal reports.
Customers can get the bags back by repaying the loan with four per cent interest within four months.
They recently lent over US$20,000 for a Hermes Birkin, which retain their high values due to their exclusivity, but will start with as little as US$190 with no upper limit on how much they will pay.
The service is filling a niche in a society which has over 1100 pawnbrokers, mainly aimed at low paid domestic workers using electronics or jewellery as collateral.
Maggie Wong, 30, told the Journal she uses the service to avoid complicated bank procedures when she needs cash for daily expenses or to pay for her sons tuition.
She has so far traded three purses (Gucci and Louis Vuittons) for nearly $1,300 in cash but now has the bags back, according to The Wall St Journal.
Customers only need to provide an address and local identification card to use the service, with the bags assessed in half an hour.
Although in a city flush with fakes, the lenders have to be vigilant against knock-offs.
"We don't tell them we know," said Yes Lady manager Irene Chu.
"We just say we can't approve the loan."
###
