Subject The article addresses the economic and financial structure of pawnshops. Objectives The aim is to consider the problems of implementing the financial mechanism in the pawnshop activities in Russia. Methods The methodological framework for the research includes a formal logic and systems approach. I investigate exclusive statistical and analytical data on pawnshop operations. Results The paper describes the specifics of pawnshop operations and their statutory regulation, shows the role of pawnshops in the society and economy, their difference from banks as financial institutions, and loans issued by pawnshops from those issued by banks. The case study discloses the financial parameters of a typical (medium-sized) pawnshop operating in Russia, and presents qualitative and quantitative characteristics of its customers. It also defines the prospects for pawnshop activity development. Conclusions Pawnshops represent a sort of financial institutions, which, on the average, earn a normal rate of return on invested capital over a long period. Inter- and intra-industry competition is a mechanism regulating the profitability of pawnshop operations. The main direction of pawnshop activities in Russia will be the process of displacing individual pawnshops by network ones. This will result in the interest rate decline on consumer loans issued by pawnshops, and entail a reduction in the number of pawnshops in Russia and capital centralization in this sphere.
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