The rise of fringe financial services in Winnipeg's North End: Client experiences, firm legitimacy and community-based alternatives

Author

Jerry Buckland, Thibault Martin, Nancy Barbour, Amelia Curran, Rana McDonald, Brendan Reimer

Organization

University of Winnipeg

Published

2003

Summary

This report documents research undertaken over the past year through the Winnipeg Inner-city Research
Alliance to examine the rise of fringe financial services in Winnipeg's North End. Fringe financial
services include a variety of financial services such as loans and cheque-cashing that are offered by fringe
banks. Although fringe banks are becoming more common today they generally operate on the margin of
the mainstream banking and credit union system in Canada.

Fringe banks include pawnshops, cheque-cashing firms, payday lenders, rent-to-own firms, tax refund
advancers, finance companies and 'white-label' automatic teller machine providers. This report explores
client experiences with fringe banks, it examines the issue of fringe bank legitimacy and it develops a
model and provides a preliminary feasibility assessment of an alternative model to fringe banks for lowincome
people. The research project has involved a series of methods including interviews with 41 North
End fringe bank clients; interviews with 27 key-informants with special knowledge about fringe banks
and North End resident’s financial needs; outlet follow-up and sample transaction and two focus group
discussions and a feasibility assessment.

The rise of fringe banks and their use is a complex phenomenon that is driven by broad changes in
Canadian society and economy. Although many of the drivers of the fringe bank growth are broad
processes, fringe banks have a particular impact on their clients, owners, employees and neighbourhoods.
The research project, rooted in a community-identified issue, has generated a significant understanding of
the social and economic impacts of fringe banking in the North End.

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Source: Consumer Policy Research Database