Some snippets from the original article...
IT pawn shops like Kim’s lend around 50-70 percent of a device’s market price at a monthly interest rate of 3 percent and an annual rate of 36 percent.
I can’t stock the pawned devices for too long since new products quickly replace older ones,” said Kim, adding he generally keeps them for one month and extends the loans for up to a few months when necessary.
Most South Koreans buy their smartphones through two-year contracts with mobile carriers, which helps them pay for the roughly 1 million won devices through monthly installments.
“What’s funny is that this is all possible since we’re living in a time where you can buy a smartphone even if you’re broke,” Kim said.
... So it seems they use their subsidised S3 as collateral for a loan to help pay the monthly contract with their telecoms company, which is a fail right there.