Chanel
Yes Lady Finance is offering loans against designer handbags.

A Hong Kong-based company is offering cash-strapped shoppers the chance to use their Chanel handbags as collateral for a loan.

While typical lenders ask for cars and homes as security, Yes Lady Finance, a mortgage brokerage firm, offers loans by pawning designer handbags.

Customers can get cash of up to 50% of the bag's value. They have four months to repay at an interest rate of 4%. Chanel, Gucci, Louis Vuitton and Hermès are among the list of the accepted designers.

Loans start at the equivalent of around HK$1,550 (£127) and can go far higher, depending on the quality of the bag. The company gave a loan of HK$250,000 when a client brought in a designer handbag made of crocodile skin.

As with traditional pawnbrokers, if the client fails to pay back the loan within a set time, the bag is sold by the company's retail arm, Milan Station Holdings, at one of its secondhand designer stores.

According to Byron Yiu, Yes Lady Finance chairman and chief executive, the company decided to capitalise on a culture where designer bags are so highly prized.

"We have both male and female clients," he said. The majority bring relatively posh handbags. We have seen people bringing several of these handbags here to get a big sum."

Milan Station staff assess the authenticity of the bags before putting them up for sale. Counterfeit goods is a huge problem in China and much of southeast Asia.

If a handbag is found to be fake, however, the company will give a false reason for its non-sale to save customer embarrassment.

Mortgage China