Gold Price Increase Benefits Pawnbroking Industry, OJK Says

Positive Impact on Collateral Valuation

The recent surge in gold prices has created a favorable environment for the pawnbroking industry, according to the Financial Services Authority (OJK). Agusman, Executive Head of Supervision at OJK, noted that the increase in gold prices allows for higher collateral valuation, potentially leading to increased lending to the public.

Risk Mitigation Through Diversification

While the rising gold prices present opportunities, Agusman emphasized that pawnbroking companies must maintain diversification of collateral rather than focusing solely on gold. This strategy is crucial for mitigating the risks associated with gold price volatility. The OJK's stance underscores the need for prudent risk management practices within the industry.