A high street pawnbrokers has launched a new service dedicated to Asian gold.

Sona Loans, is said to be the UK’s first high street branch to offer gold-backed loans to the Asian community and has been launched in Southall by the H&T group.

The store that offers Asians the opportunity to take out a financial loan against your gold holdings.

Research shows that over the past three years there has been a 53% increase in Asian gold (22-carat) being used to fund loans.

Demand for gold-backed loans at Sona Loans has shown that the average loan is around £1,500, and the average loan duration is around four months.

However, the firm believes that increasing amounts of Asians are using their gold assets to take out as much as £35,000 in a single transaction.

The breakdown of nationwide demand for gold-backed loans is highly concentrated in UK areas where there are significant Asian communities.

A ‘gold heat map’ demonstrates that these hot areas are the Midlands (including Derby and Nottingham), Birmingham, North and South London, and Scotland.

Mark Harrold, Regional Manager at Sona Loans said: “We have found a demand from the Asian community to use gold-backed loans for a variety of purposes covering day-to-day spending, home renovations, business supply chain finance and business set-up. “Indeed, with the uncertainty of high street credit available from banks, we are seeing a real increase in business demand for this service. We are proud to be the first stand-alone, high street store of this type in the UK”.

The firm is looking at opening more Sona stores in Blackburn. Bolton, Bradford and Rochdale.

“We realise that gold has particular sentimental and religious values within the Asian community.” Added Mr Harrold “One of the key things key ethics is to ensure that people get their jewellery back. This is short term solution.

“People can pay monthly weekly or monthly.”

There is a particular emphasis on identification of the gold.

“We would want proof and ownership and if need be we will even visit the home of the customer to ensure identification.” He said.