As part of the official introduction of its cooperation with TD Bank Group, Canada Post now provides loans in addition to stamps, packaging, and other financial services. The loan initiative, which might be expanded to include additional services, will provide Canadians with more financial options across the nation, including in rural, remote, and Indigenous communities.
“We believe that this is the best way of providing Canadians with better access to financial services, especially underserved Canadians,” noted Michael Yee, vice-president of financial services at Canada Post, while discussing the launch during an interview.
The loans, which have amounts between $1,000 and $30,000, bridge the gap between established banks and payday lenders. The interest rates on the loans will be set by TD, but customers are not required to have bank accounts and can be credit newbies. “What we found when we spoke to Canadians is that there is really a need in the market in accessing simple and affordable loan services,” said Yee.
The MyMoney lending scheme, which the postal service has been testing in trial projects since last year, has recently been expanded to include all 6,000 of its post offices in the country. Customers have been using the loans to pay for unforeseen situations like auto repairs or veterinary fees as well as to consolidate debt from products with higher interest rates.
Although postal employees are prohibited from giving financial advice, they are trained to guide consumers on how to apply for loans online or over the phone and to provide further informational materials. Through the actual application, decision-making, and funding processes, TD staff will assist consumers. According to Michael Rhodes, group head of Canadian personal banking, the alliance will enable TD to reach more Canadians.
“Financial service is an essential service, and this alliance enables TD to play a meaningful role in helping to expand access to banking to more Canadians.”
The commercial terms of the agreement with TD, particularly how the two are splitting profits and risks, were not made clear by Canada Post.
According to national president Jan Simpson, the Canadian Union of Postal Workers supports the initiative as part of a larger campaign to introduce low-cost banking at post offices. Other nations like Italy, Brazil, New Zealand, and Switzerland also provide postal banking, and Canada did have a national savings bank with post office locations until 1969. The expansion of services, according to Simpson, is crucial as Canada Post strives to offer more, but it might also help reduce the company’s debt levels, produce decent unionised employment, and benefit communities.
The new programme might be a part of a larger expansion, according to Yee. Canada Post already offers a variety of financial services, including foreign remittances, money orders, and prepaid gift cards, totalling five million transactions worth $2 billion annually.
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