The cash store financial was founded in 2001 in Edmonton (N.A, 2009) and it was initially
named Rent cash. The company has come a long way since then and Cash Store is
Canada’s only short term financial institution listed both on the NYSE and the Toronto
stock exchange. Cash store has been a successful company and its shares were trading at
18 dollars on the stock exchange but after government regulations the company that
manages money for people has become bankrupt and had to be taken down from the stock
exchange. This business is based in Edmonton and is the supplier of short term financing
to Canadians who live on weekly paychecks. 47 percent of Canadians have cash flow
problems and about 20% use payday loans to keep going that is 7 – 10 % of all Canadians
(Yew, 2014). Cash store has 510 branches in Canada and 28 in the United Kingdom
(Warnica, 2013). The majority of the business they generate comes from the province of
Ontario. This company employs 2000 people nationwide (Thomas, 2014).
Cash store financial acts as an intermediary between lenders and borrowers to arrange for
short term financing to their customers, these loans are from one paycheck to the next.
Other than that the people who take these loans are in a situation where they cannot get
approved to get loan from a bank. These people are approved at the cash store and given a
loan with high interest charges usually upwards of 40% and transaction cost, which the
Ontario government set to $21 on every $100 (Warnica, 2013). Because of these high
interest and transaction cost most of the customers keep using the service after paying off
their debt.
Other services offered by the Cash store are debit cards and credit cards to its customers,
other than that customers can open up bank accounts in this company and deposit money.
The cash store also has western union in its branches and is in the business of wire
transfers as well. It holds 30 % of the market share in the alternative debt industry by
branch count and most of that business in in Ontario. The company operates with two
brand names cash store and Instaloans these two brands are one of the most recognizable
in this industry the other one is money mart which has 38 % (Yew, 2014) share of the
alternative debt market.
Nonmarket Environment
The nonmarket issue that I’m going to talk about is the regulatory side of the issue as
