Pawn Shops in Brazil: A Rising Trend Amidst High Interest Rates

Amidst rising interest rates in Brazil, many are turning to pawn shops for loans. The high cost of borrowing from traditional banks is driving this trend, with Caixa Econômica Federal reporting over R$6 billion in pawn shop loans in the first four months of 2025 alone. "It's a way to keep your belongings and get money immediately," explains Nuria Paez Borras, a retiree who recently used this service. The increased demand is also fueled by the rising price of gold, which has increased by over 40% in the last year. While it offers a quick solution, the risk of losing collateral remains a concern. This highlights the financial challenges facing Brazilians in the current economic climate, forcing them to explore alternative and sometimes risky solutions. The government is aware of the situation and is exploring measures to mitigate the impact of high interest rates on the population.