FORBES AFRICA
01 Feb 2014,p.11
 PAWN FOR THE RICH WHO NEED MONEY
 Yes, the rich have cash flow issues too. But you won’t see anyone bringing in their old CD player so they can borrow a few dollars to get them through the end of the month. Instead, lenders offer loans that range from thousands to millions.
Nestled in a quiet street in Sandton, Johannesburg, Lamna is among the few private lenders that provides short-terms loans against personal valuables. Clients are offering expensive jewelry, wine collections, art collections and luxury vehicles, such as the Aston Martins and Ferraris, as collateral for immediate access to cash.
Although traditional baking is still the most important conduit for money, there is a gap that businesses such as Lamna are willing to fill. Clients are flocking through their doors because of the ease and the speed at which these macro-loans are handed out.
So, private lenders say business is good and the rich list keeps growing. And for the asset-rich hoarders, it is always good to know that access to quick cash is just a Ferrari or Tag Heuer watch away.
ILLUSTRATIVE EXAMPLE
Client borrows R10,000 for 90 days.
Loan Amount | Repayment Period | Monthly Interest | Total Cost of Loan | Initiation Fee | Monthly Fee | APR |
|---|---|---|---|---|---|---|
R10 000 | 3 months | R500.00 | R2 914.50 | R1 207.50 | R569.00 | 60% |
Fixed rates range from 36% to 60% APR and payment options range from minimum 3 to maximum 24 months. Apart from the initiation and monthly fees shown below, the only additional fee is credit life insurance if the borrower does not have this already.