Financing is expanding out from banks and credit unions to major retailers such as Walmart and Costco, according to a recent article in the New York Times. Recent declines in small business lending by financial institutions have reportedly opened doors for retail stores to start selling insurance policies and even home mortgages.
“You’ve got to remember, Walmart is intended to be a one-stop shop,” Charles M. Holley Jr., the company’s chief financial officer, told the newspaper.
Given that retailers don’t have the same regulatory guidelines to follow that financial institutions do, these retail companies might start to appeal to a less creditworthy audience. This means that financial products have become more accessible, especially for consumers with little or no credit history.
Banking products aren’t expected to be huge profit centers for the retailers, the Times said. Rather, they’re intended to help customers get more cash to spend in the store. Read more about the new financing options described by the New York Times here.