EDMONTON, Feb. 1, 2013 /PRNewswire/ - The Cash Store Financial Services Inc. ("Cash Store Financial") (TSX:CSF) (NYSE:CSFS) today announced that it has launched a new suite of line of credit products in Ontario. These line of credit products are designed to better serve the under-banked consumers through flexible medium term credit products and help build a credit history and move toward lower cost mainstream credit.
"This suite of unsecured line of credit products enables consumers to move up the credit ladder toward credit-scored products that will eventually enable access to mainstream lending products. With each step up the ladder consumers get better rates and more flexible repayment terms," said Gordon J. Reykdal, Chairman and CEO.
"Over the past 10 years Cash Store Financial has leveraged the popularity of payday loan products to build a network of 178 branches in the province of Ontario. We have distinguished ourselves from our competitors by building a branch environment, much like a bank, that enables consumers to conduct their affairs in a private and respectful manner. Customers appreciate this approach and they have demanded better products and access to more bank-like services. Expanding our focus to emphasize a more mainstream approach has been a long-term priority for the Company. The potential to more effectively leverage our branch network is significant."
Mr. Reykdal added: "Our ultimate goal is to lengthen the relationship with the customer and to reduce their future borrowing costs with a more traditional source of funding. We believe this product offering is a great first step toward this goal."Cash Store Financial's line of credit products have been tested nationally for over a year. The full suite of products was introduced in Manitoba in the fall of 2012, where the Company no longer offers payday loans. Consumer acceptance of the product offerings has been strong. The Company intends to establish lines of credit products in Ontario as its primary product offering. Payday loans are no longer being offered but the Company intends to maintain a payday loan license in the Province of Ontario, at least until such time that the success of the new product offering has materialized as the Company anticipates. The lines of credit are traditional, revolving loans, with regular minimum payments tailored to customers' needs and profiles. Management has determined that the restrictive nature of Ontario's payday loan regulatory scheme prevents it from meeting consumer demands. These new product offerings fall under relevant Federal laws. This provides the Company with the requisite flexibility to effectively serve a broader customer base with better products, at rates that are appropriate to the credit risk associated with each line of credit advanced. About Cash Store Financial Cash Store Financial is the only lender and broker of short‐term advances and provider of other financial services in Canada that is listed on the Toronto Stock Exchange (TSX: CSF). Cash Store Financial also trades on the New York Stock Exchange (NYSE: CSFS). Cash Store Financial operates 512 branches across Canada under the banners "Cash Store Financial", "Instaloans" and "The Title Store". Cash Store Financial also operates 25 branches in the United Kingdom. Cash Store Financial and Instaloans primarily act as lenders and brokers to facilitate short-term advances and provide other financial services to income-earning consumers who may not be able to obtain them from traditional banks. Cash Store Financial also provides a private-label debit card (the "Freedom" card) and a prepaid credit card (the "Freedom MasterCard") as well as other financial services, including bank accounts.