Monday, January 30, 2012

Poor in Paris? Visit your tante

This may look like a bank but it's a pawnbroker used by the poor in Paris. My friend sent me an article from good business which is in English and clearly explains this peculiarly French version of going to the pawnbroker or visiting your 'tante'. So I'm using a lot of the article because for me it finally cleared up this confusion I've felt about this 'tante'. Researching a book several years ago, Laura my editor suggested I look up a man who used Bayonne's Crédit municipal bank - pawnbroker - to embezzle huge funds which resulted in a scandal and exploded in December 1933. The embezzler Alexandre Stavisky, known as le beau Sasha - the handsome Sasha - was linked to several government deputies in a complicated scheme and some say this brought the Daladier government down.
He later 'committed' suicide.
This week, thousands of lucky French people had their financial obligations forgiven after the country's oldest bank decided to simply wipe their slate clean. The 3,500 clients who benefitted from the bank’s largesse had debts of 150 euros or less - about $190 - with the Crédit Municipal de Paris, also known as the "Mont-de-piété," the bank of the poor, which has for centuries allowed the needy to get loans against their valuables—an ethical pawnshop, or the original microlender.
Celebrities of the past secretly used the bank: Victor Hugo, Claude Monet and Napoleon’s first wife, Joséphine de Beauharnais,
among others. Prince François d'Orléans, third son of King Louis-Philippe, once pawned his watch to settle a gambling debt. Ashamed when asked what happened to his precious timepiece, he answered, "I left it at my aunt's' ma tante'.To this day, getting help from 'ma tante' is a discrete way of saying one's been going to the "poor people's bank."
The unexpected gift is a way for the bank to celebrate its 375th anniversary. The Crédit Municipal de Paris was created in 1637 by Théophraste Renaudot, a doctor, journalist and philanthropist who wanted to combat poverty by giving the needy access to fair banking. Interest rates at the time could go up to 130 percent. The doctor's idea was to give the poor people of Paris loans they could reasonably hope to repay, at decent rates for the time (about 10 percent annually) against whatever collateral they could produce: pots and pans, linens, silverware, artisans' tools. Records show a 19th-century woman so destitute her only possession was her mattress. Every morning, she would carry it to the bank and pawn it. With that money, she'd buy potatoes, sell them for a profit during the day and buy back her mattress at night.
Today, the bank stores more than a million objects, from the small piece of jewelry to the grand masterpiece, in headquarters covering a city block in the historical center of Paris. With a capitalization of 60 million euros, the bank had 93 million euros in pawn-broking loans outstanding in 2010. Its 2010 profit of 1.3 million euros was partly assigned to improving shelters for the homeless. Similar city-owned, not-for-profit banks opened all over the country ie. Bayonne which Stavisky took advantage of, on the same principle: Pawn an object and you get a yearlong loan. Pay off the interest - 4 to 8.9 percent annually- and you can extend the loan; pay off the principal and you get your property back. If your valuable is sold for more than you owe, the profit is yours. These banks were eventually granted a state monopoly on pawn-broking loans, which continues to this day; France is thus a country without pawnshops."People were never very proud to go to the Mont-de-piété," says an official. It may be why people turned away from it: With the prosperity of the 20th century, people wanted to forget this symbol of poverty. But it is no longer forgotten."Our director likes to say our waiting room is like that of a hospital emergency room," the official adds "Everyone comes to it at some point."
Cara - Tuesday


  1. This is so interesting. It evokes a much more benign system of helping the needy than we have here in the states. Although, Europe is struggling too, it seems to have card about its people more we do here.

  2. Very interesting, Cara. Having just listened to the post-FL primary speeches, the avowed platforms suggest a strong future for pawn shops in the U.S. But, of course, not of the benevolent government model you describe.

  3. How interesting and comforting in fact. Especially in contrast with the controversies about the Grameen Bank microcredits, which I have learnt from a shocking Norwegian documentary film showing the dark side of microfinancing the poors in Bangladesh.