CAVITE STATE UNIVERSITY

(CvSU)
Don Severino De Las Alas Campus (Main)
Indang Cavite
Tel. No. (046) 415-0013 Fax No. (046) 415-0012
E-mail: cvsu@asia.com

COLLEGE OF ECONOMICS, MANAGEMENT AND DEVELOPMENT

STUDIES
Department of Management

PROPOSAL ON THE ESTABLISHMENT OF THE COMPANY

ACORY PAWN SHOP

In partial fulfillment
of the requirements for the course FMGT60
Banking and Financial Institutions

Submitted by:
Group 5

Abbas, Sheeren M.
Cas, Jabe J.
Olidor, Baby Jollibee Cristhy B.
Recio, Paul Martin R.
Yu, Julie Ann E.

BSBM FM 3-2

Submitted to:

Ms. Princess M. Feliciano

December 2019
I. INTRODUCTION

A. COMPANY PROFILE

Company Name: ACORY PAWN SHOP

Physical Store: Don P. Ocampos Ave., Poblacion, Dasmariñas,

Cavite

Contact Number: (046) 416 – 4321

Email Address: 1stAcoryph@gmail.com

Store Operation: Mondays to Saturdays - 8am to 5pm

Sundays - 8am to 12noon

ACORY PAWN SHOP will offer our pawning services to the common people

that are in need of financial assistance. We will provide you a better appraisal of your

valuable items as a pawn collateral with a good and fast customer service. And to keep

our customer’s loyalty, we will let them choose from our “Customers Choice Packages

Lists” and an additional perks of having an “ACORY Card Ko” Loyalty Card. We will

establish our company on December 2020 in Dasmariñas, Cavite.

The ACORY stands for the Surnames of the Owners of the Company:

A – ABBAS

C – CAS

O – OLIDOR

R – RECIO

Y – YU
B. ORGANIZATIONAL STRUCTURE, MANAGEMENT AND GOVERNANCE

ACORY PAWN SHOP ORGANIZATIONAL STRUCTURE

For our humble beginning we will do our very best to fulfill the needs of our

pawn shop in all aspects. We will help each other or our co-owners and we will

specialize our multi-tasking skills to accommodate all the positions needed to

successfully operate our own company. And Later on we will hire an additional staff to

fulfill other lower positions.

C. COMPANY GOALS AND OBJECTIVES

To make ACORY Pawn Shop a trustworthy, reliable, and fastest-growing

pawnshop in the Philippines.

D. MISSION AND VISION

ACORY’S Vision:

To be One of the Country’s Outstanding Pawn Shop and Financial

Solution Provider.

ACORY’S Mission:

We Create Lasting Relationship of Trust and Confidence with Clients

and other Business Partners.

E. COMPANY LOGO
F. COMPANY TAG LINE

 “Pawn with Comfort”

G. TARGET MARKET

 Common Filipino Citizens; who needs financial assistance.

Our Clients must have to:

1. Present a (2) Valid Identification Card issued by the Government (for

Student must present (1) Valid School Identification Card supported by a

certification from the barangay where the client resides.)

 Residential Address must be indicated.

 Readable Details.

 Not Expired.

2. TO BE OUR MEMBER: You just have to avail our Loyalty Card the “ACORY

CARD KO” for only P100 and you can enjoy our perks, rewards and discounts

until your last breath.

H. PRODUCTS AND SERVICES OFFERED

Pawning is the Main Service Offered by ACORY.

Our Acceptable Items are as follows:

 JEWELRIES

 Made of Gold, White Gold, Diamond

 ELECTRONIC GADGETS

 Branded Cellular Phones, Tablets and IPad

 Branded Laptops

 DSLR Cameras
I. MARKETING STRATEGIES

1. We have a Loyalty Card that serves as a Lifetime Coupon of Our Clients.

The benefits of this “ACORY CARD KO”

a. Additional Quarter for Renewal

b. With Lower Interest Rate on Renewal of Pawned Items.

c. For Every P1, 000 is equivalent to 2 points (Points are converted into Cash.)

d. Reminder Scheduled Text Message to Notify the Members of Pawned Due

Dates to avoid incurring additional penalty and Birthday Greetings.

e. For Transaction - No need to bring an Id. Just bring this ACORY Card Ko with

you.

2. We will create our Facebook Page to reach more Potential Clients.

Nowadays, it is more convenient to reach more potential customers with the

use of Social Media.

3. Advertising through the use of Flyers.

We will distribute it to the public. This is our good start because using these

flyers is more low cost than advertising on news or television.

4. Customers Feedback (Feedback Form)

This part is important because knowing the insights, thoughts, needs and wants

of our customers may help our Company to improve more. We might have the best

expertise in the industry in which our company operates, but our professional

knowledge will never be more valuable to business performance than our customer

insights. Customer’s opinions help us ensure that the company’s end service will

actually meet their expectations, solve their problems and fulfill their needs.

II. BODY OF THE PROPOSAL

A. CAPITAL REQUIREMENTS

We the owner of ACORY Pawn Shop will establish our company with the

combination of our savings and profits from different investments. The Capital of

ACORY Pawn Shop is Php100,000 which is being required according to Section

4106P of the MORNBFI-P – Manual of Regulations for Non-Bank Financial Institutions

of the Philippines that every pawnshops shall have a minimum paid-in capital of

Php100,000.

By the Section 4106P of the MORNBFI-P: a pawnshop’s paid-in capital may be in the

form of:

a. Cash;

b. Tangible properties, including real estate and improvements thereon; and

c. A combination of cash and tangible properties.

B. REGULATION ON OPERATION

ACORY Pawn Shop mandating the disclosure of the effective interest rate of

the loan, including the charges on the transaction to their customers. Pawnshop are

also mandated to inform the customers about the policy on insurance of pawned items,

maturity date and grace period in cases when the customer failed to redeem the loan.

Under the law, customers have 90 days after maturity to redeem their pawned articles

and pawnshops must notify their clients within the 90 day period before they can sell

the pawned items in an auction. For the convenience of customers, the new rules will

require them to indicate in the pawn ticket their preferred mode of receiving the notice,

whether by mail or courier to a given address, or by SMS or text through a specified

mobile phone.

C. REGULATION ON THE 5 C’S

Capacity - This would refer the customer's ability to repay the loan and the credit

history. We are going to have a look at their past repayment history, both business and

personal. Always indicate every possible source of repayment at their disposal.

Collateral - ACORY Pawn Shop offer collateral-based loans - meaning the loan is

secured by something of value. We take in something the customer own, its either Fine

Jewelries or Electronic Gadgets. And as the pawnbroker we keep safe of the

customer’s item until they repay the loan. Just in case the Pawner did not pay their

loan we will open their item for auction for us to recover our cash.

Capital – We will evaluate the amount that the business owners has to offer. We will

follow the Manual of Regulations for Non-Bank Financial Institutions of the Philippines

Rules and Regulations.

Conditions – This refers on how the borrower intends to use money. We consider

conditions that are outside of the borrower’s control. We can use here Terms and

Conditions that are Company has provided.

Character – This is the customers trustworthy enough to handle the lender’s money,

what is its current reputation in the industry? The character would determine the type

of business owner they are. If we see them as responsible and reliable business owner.

D. REGULATION ON COLLECTION AND PROCESS

How to Pawn with ACORY

1. Go to our Physical Store located in Dasmariñas Bayan.

2. Present your Jewelry or Branded Electronic Gadget to be appraised.

3. Decide your pawning amount not to exceed the maximum appraised value of

your item.

4. Choose on Customer’s Choice Packages List for the interest rate.

5. Fill-out and sign the Information Sheet provided in the branch.

6. (Optional - Avail our Loyalty Card for only P100)

Fill-out the Membership form for ACORY CARD KO.

7. Sign the printed pawn ticket. You will receive the original copy of the duplicate

pawn ticket.

8. For those who availed our Loyalty Card please Sign the signature section at

the back of the card as soon as you receive your card.

9. Count and check the money received from your pawn before leaving the store.
How to Renew Your Pawn

1. Come and visit our Physical Store located in Dasmariñas Bayan together with

your pawned ticket.

2. Sign the back of the pawn ticket at the line labeled “Pawner to Renew Pawned”.

3. Present the signed pawn ticket and the payment for the amount due on

renewing the item.

4. Do not forget to present your “ACORY CARD KO” loyalty card to vouch your

discount for your pawn renewal.

5. Sign the new pawn ticket. You will receive the original copy of the duplicate

pawn ticket.

NOTE: Non-Member has a maximum of (1) quarter of pawned renewal only.

Loyalty Card Holder has an additional quarter of pawned renewal.

How to Redeem your Pawn

1. Come and visit our Physical Store located in Dasmariñas Bayan together with

your pawned ticket.

2. Signed the back of the pawn ticket at the line labeled “Pawner to Redeem

Pawn” under our Term: Received the article(s) in the same condition when

pawned and redeemed.

3. Present the signed Pawn Ticket, Loyalty Card and the Payment for the amount

due on redeeming the item.

4. Check the item before leaving the branch.

5. And do not forget to give us a feedback.

(Fill-out the feedback form and drop it on the Feedback Box near the Counter.)
E. REGULATIONS ON INTEREST AND PENALTIES

ACORY Pawn Shop assures highest appraisal and security for pawned items.

Pawner have the opportunity to choose on our Customer’s Packages List upon

pawning. And pawner shall know that our Renewal Fee will be (4%) of the principal

loan. To maintain the excellent standard of service offered by Acory Pawnshop clients

will be charged additional one percent (1%) of the principal loan, but not exceeding

five pesos (Php5). No other hidden charges will be deducted from the loan.

_________________________________________________________________

Customer’s Choice Packages List

Package Uno – 3 % per Month! With 1 % advance Interest

(Just in case. Pawner wants to redeem the Pawn within day/s)

01 – 10 days = 1 %

11 – 20 days = 2 %

21 – 30 days = 3 %

Package Dos – 3.5 % per Month – No Advance Interest

Package Tres – 3 % per Month! With 1 Month Advance Interest

 EXPLANATION of Customer’s Choice Packages List

Package Uno - 3 % per Month! With 1 % advance Interest

EXPLANATION: P5,000 Loan Amount by the Pawner

Decide to Redeem the Pawn in:

Non-Member: Take Home Amount is P 4,950.00

01 – 10 days = P5,000.00 Redeem Amount

11 – 20 days = P5,050.00 Redeem Amount (1 % already paid in advance)

21 – 30 days = P5,100.00 Redeem Amount (1 % already paid in advance)

Loyalty Card Holder: with 5% discount on Interest

Take Home Amount is P 4,952.50

01 – 10 days = P5,000.00 Redeem Amount

11 – 20 days = P5,047.50 Redeem Amount (1 % already paid in advance)

21 – 30 days = P5,095.00 Redeem Amount (1 % already paid in advance)

After 1 Quarter: Renewal Fee (4% of Loan Amount)

Non-Member Redeem Amount: P5,400.00

Non-Member Renewal Amount: P600.00

Loyalty Card Holder Redeem Amount: P5,380.00

Loyalty Card Holder Renewal Amount: P580.00

_________________________________________________________________
Package Dos – 3.5 % per Month – No Advance Interest

EXPLANATION: P5,000 Loan Amount by the Pawner

Take Home Amount is P 5,000.00

After 1 Quarter: Renewal Fee (4% of Loan Amount)

Non-Member Redeem Amount: P5,525.00

Non-Member Renewal Amount: P725.00

Loyalty Card Holder Redeem Amount: P5,498.75

Loyalty Card Holder Renewal Amount: P698.75

_________________________________________________________________

Package Tres – 3 % per Month! With 1 Month Advance Interest

EXPLANATION: P5,000 Loan Amount by the Pawner

Take Home Amount is P 4,850.00 for Non-Member

P 4,857.50 for Loyalty Card Holder

After 1 Quarter: Renewal Fee (4% of Loan Amount)

Non-Member Redeem Amount: P5,300.00

Non-Member Renewal Amount: P500.00

Loyalty Card Holder Redeem Amount: P5,285.00

Loyalty Card Holder Renewal Amount: P485.00

ACORY’S TERMS AND CONDITIONS

1) The pawner voluntarily accepts the pawnshop’s appraisal as proper.

2) The parties agree on the interest rates imposed in this contract of pledge. In case

of dispute, the regular courts of law have the vested power to determine the

reasonableness and legality of interest rates. The pawnshop hereby agrees not to

collect advance interest for a period of more than one (1) year.

3) The service charge is equivalent to one percent (1%) of the principal loan, but shall

not exceed five pesos (P5.00). No other charges shall be collected.

4) This loan is renewable from the date of pawning up to 95 days thereafter, including

Sundays and holidays. The principal loan shall be repayable within the period of 3

months from the date of the pawn indicated in the pawn ticket.

5) Upon maturity of this loan, as indicated above, the pawner still has ninety (90) days

from maturity date within which to redeem the pawn by paying the principal loan plus

the interest that shall have accrued thereon.

6) The amount of interest due and payable after the maturity date of the loan up to the

redemption period shall be computed upon redemption at the rate of interest provided

above based on the sum of the principal loan and interest earned as of the date of

maturity. Any additional penalty and/or interest shall also be computed in the same

manner.

7) The pawnshop shall notify the pawner of any change in its business address/location

through: (1) publication in English and in Filipino or in the local dialect in two (2) daily

newspapers of general circulation in the municipality where the pawnshop is closing

the business; and (2) posting in English and Filipino or in the local dialect for one (1)

month after date publication in a conspicuous place in the premises to be vacated and

to be transferred to.
8) The pawner and the pawnshop agree that the notice of auction sale shall be

delivered via [ ] e-mail [ ] SMS [ ] fax or [ ] registered mail or courier at

________________________ (check box of agreed mode and indicate the email

address; mobile phone no.; fax no., or complete residential address, as may be

appropriate, in the space provided). In case no mode of notification is agreed upon,

the default shall be via ordinary mail. The pawnshop shall have the right to sell or

dispose of the pawn in public auction if the pawner fails to redeem the pawn within the

ninety (90) day grace period. The pawnshop shall send the reminder on and before

the expiration of the ninety (90) day grace period.

9) The pawner shall advise the pawnshop of any change of address/ mobile phone

number/e-mail address/fax number.

10) This ticket shall be surrendered at maturity date upon payment of the loan. In case

of loss or destruction of this ticket, the pawner hereby undertakes to personally present

an affidavit to the pawnshop before the redemption period expires. The pawnshop has

two (2) days to decide whether to accept (1) the affidavit in place of the original pawn

ticket; or (2) to issue a substitute pawn ticket, thereby cancelling the original

11) In case of pre-payment of this loan by pawner, the interest collected in advance

shall accrue in full to the pawnshop.

12) The pawner shall not be entitled to the excess of the public auction sale price over

the amount of principal, interest and service fee; neither shall the pawnshop be entitled

to recover the deficiency from the pawner.

13) The pawner declares under the penalty of the Anti-Fencing Law that he is the

owner of the property subject of this contract.

14) The pawnshop shall exercise reasonable care and caution that an ordinary prudent

person would as to his own property over the thing pawned in accordance with
Republic Act No. 386 (Civil Code of the Philippines), as amended. Accordingly, the

pawnshop shall insure all pawned items, except those which are kept inside a fireproof

vault in accordance with the pertinent regulations of the Bangko Sentral ng Pilipinas.

Claims for restitution by pawners in case of loss, destruction or defect of the pawns

due to robbery, fire and other fortuitous event, with or without the fault of the pawnshop,

its owner, managing partner, directors and officers are cognizable by the regular

courts.

15) The pawnee shall not be liable for the loss or damage of the article pawned due to

fortuitous events of force majeure. When the loss is due to the fault and/or negligence

of the pawnee, the amount of its liability, if any, shall be limited to the appraised value

appearing on the face hereof.

16) Venue of all judicial and administrative cases or proceedings and other legal

incidents arising our of or in connection with this contract shall solely and exclusively

be brought before appropriate courts, departments, offices or agencies of the

government situated in Tagaytay City.

17) The Authorized representative must present valid identification papers.

18) For purposes of computing the amount of interest for pledge loans paid after

maturity date, a fraction of the original terms of the loan agreed upon as indicated at

the face of the pawn ticket shall be considered as one full term.

19) In case this loan is not paid on maturity date, the pawner hereby agrees to pay in

addition to accrued interest, 2 percent per month of the principal, as liquidated

damages. For purposes of computing the amount of liquidated damages, a fraction of

the original term of the loan agreed upon as indicated at the face of the pawn ticket

shall be considered as one full term. The Pawnshop may, at its sole option, allow

redemption of pawn after expiration of the 90-day grace period upon payment by the
pawner of the loan principal plus interest due and liquidated damages at the rates and

manner of computation herein prescribed.

20) Member: Chamber of Pawnbrokers of the Philippines

III. COMPANY STRENGTHS AND WEAKNESSES

ACORY’S STRENGTHS

1. Instant Access to Cash, Easy Process and Reliable – In just minutes we

can finish the transaction

2. Safer Transactions – We assure to implements strict rules among

pawnshops to ensure fair, ethical, and legal money lending practices.

Because all Pawnshops are required to be licensed.

3. Longer Days of Renewal - Up to 2 quarters

4. Highest Appraisal Rate - We give more values to client’s items that is being

pawned and customers receive more valuations of their precious items.

5. NO EXPIRATION of Loyalty Card – our “ACORY CARD KO” has no expiration

unlike to other pawnshops that you have to repay just to renew the Card.

ACORY’S WEAKNESSES

1. Well-known Competitors – Those well-known pawnshop that offer similar

products quickly and has commercial on National Television.

2. Single Location – This can be our weakness on our first months to year

because we only have one physical store. It means we have a limited reach

unlike to other pawnshops who has more branches that can reach more

customers.
 3. Having Low Interest Rate resulting to Low Profit – compare to our

competitors with higher interest rate resulting to much higher of ROI.

4. Highest Appraisal Rate – This is our strength but basically it can be our

weakness because it can cause to high foot traffic that we cannot

accommodate. Because of the higher appraisal rate may result to higher the

capital we need to provide that may cause to accommodate limited clients only.

5. Prone to Thief - Because of the items that we have in our store it might catch

the attention of some thief. (However we will do everything that we can do to

ensure our store security.)

III. INSIGHTS

As a pawnshop we can help many Filipinos who are in need of financial

assistance / services and its effect is that the small business will expand in the

Philippines. We can also help the economy for we are paying taxes in the government

and they use it to build Infrastructure and salaries to the public workers.