Canadians can now borrow money through the post office

Canadians can now borrow money through the post office.

Canada Post has partnered with TD Bank to offer personal loans ranging from $1,000 to $30,000 at fixed or variable rates. Applications can be filled out online.

Canada Post’s loan project, which was piloted in Nova Scotia a year ago, secretly kicked off nationwide on Sept. 12.

The MyMoney loan offers lower interest rates than other loan products and credit cards through Canada Post and is aimed at underserved regions.

“Canadians have told us they face limitations when it comes to accessing easy, affordable and transparent financial services,” Canada Post spokesman Philipe Legault said in an email. “By combining Canada Post’s strength in serving the entire country with the expertise and security of a long-standing financial services provider, we believe we can increase access and options for more Canadians.”

Canada Post is a crown company mandated to operate in rural areas. It has more than 6,000 post offices across Canada.

Now that the internet has stalled demand for letter mail, Canada Post has sought to reinvent its services and make better use of its rural post offices, says Ken Wong, a marketing professor at Queen’s University Smith School of Business.

Canada Post almost lost half a billion dollars last year and posted a pre-tax loss of $490 million in 2021.

“As it became increasingly clear over the last decade that post offices were being used less frequently, there was a lot of evidence that Canada Post had all of these properties as one of its greatest assets,” Wong said.

“The question was, ‘What else can we do in all these places?’ It has long been discussed that these postal areas could serve as bank branches,” he said.

“It’s really Canada Post trying to take advantage of all of these locations and the fact that they have access to all of these Canadians.”

Offering financial services is not a new concept for Swiss Post. Canada Post already offers a wide range of financial services, including domestic and international money transfers, postal orders, and the sale of payment options such as rechargeable prepaid cards, gift cards, eVouchers, and wire transfer payments.

The Canadian Union of Postal Workers has long advocated for Canada Post to provide banking and financial services to reach rural towns and villages that are unbanked and as an alternative to Payday lenders with high interest rates.

Canada Post hasn’t said if it plans to introduce more banking services. “Right now, our focus is on ensuring a successful national launch,” Legault said.

Whether the new service will be successful remains to be seen, Wong said, especially given the market uncertainty.

“I don’t think you’re going to see a lot of adoption in urban centers, but you’re likely to see it in more rural areas,” Wong said.

During the 2021 market test at select Nova Scotia post offices, Canadians used the loans for unexpected emergencies such as car repairs, vet bills and to help with major purchases.

With rising inflation driving up the cost of living, “some people will be short of cash,” Wong said, so they might turn to an easily accessible product like MyMoney.

“But at the same time, there’s a lot of uncertainty around interest rates and inflation, so there may not be much demand for credit.”

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