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The year was 1994; the dawn of democracy. “I thought our country was a place of the future,” says Mukheibir. “I was very, very thrilled about the opportunities of the new South Africa. I had lots of excitement, lots of passion and no money.”

Despite lacking capital and knowing very little about franchising, Mukheibir brought the Cash Converters concept from Australia to South Africa and opened his first store in Cape Town on 1 October 1994.

Pawn brokers vs. Second-hand dealers

There are currently in excess of 12 000 pawn brokers in South Africa of which Cash Converters are, by far, the largest one. Pawn brokers differ from second-hand dealers in that they don’t only sell used goods, but also lend money – a very lucrative income stream for Cash Converters. “You give us your watch,” says Mukheibir, “and we give you R50. We’ll then hold on to your watch and, if you have the money, with a bit of interest, by the deadline we’ll give you back your watch.”

Pawn goes mainstream

Against all odds Cash Converters brought pawn broking into the mainstream retail environment. “It was a challenge for us, because we’re not perceived to be aspirational in any way, shape or form,” says Mukheibir.

Mukheibir ran the first Cape Town store for two years before selling it off to the first Cash Converters franchisee. He then opened 12 new stores in Cape Town before relocating to Gauteng to run the business from there.

Convenient like a McDonalds drive-through

“We aim to conveniently provide people with quick access to cash,” says Mukheibir. “You’re always tripping over something lying around at home and want to get rid of it. You bring it to us, we value it and, literally, within 10 minutes you’re on your way home with money in your pocket. It’s like a McDonalds drive-through. You want food quickly, you go there.”

Enter micro-lending…

It was around 2005, with the economy in top-gear, that Cash Converters also became a micro lender. “Everyone was buying new and we struggled to get stock. That’s when we started supplying customers with short-term loans.

“Tough times are good for Cash Converters; it’s like having the wind behind you,” admits Mukheibir. “But in the end you still have to service your customers properly and you still have to pay prices that are fair and reasonable or they’ll go elsewhere.”

Taking on the Gumtrees and OLXs of the world

“Online is, for us, the next frontier,” says Mukheibir. “Part of our strategy going forward is having a website that sells the products in our bricks and mortar stores. You’ll then be able to buy anything off the website or from our stores. It won’t matter whether you’re in Johannesburg or Cape Town; you’ll be able to buy it from anywhere.”

Cash Converters recently opened a number of very successful stores in Namibia and Zambia. “Our focus for the time being is, however, South Africa where our 70 stores have a combined turnover of almost R500-million.”

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This article first appeared on CapeTalk : How pawn went mainstream (and how Richard Mukheibir became its biggest star)