If your wallet is flat and payday is far away, DFC Global can tide you over. The company owns some 1,350 check-cashing and payday loan stores (and franchises about 50 additional locations) in North America and Europe. The stores operate under such names as Money Mart, Money Shop, Insta-Cheques, Sefina, Suttons and Robertsons, and The Check Cashing Store. In addition to check cashing and short-term loans, the stores offer money transfer services, money orders, tax filing services, gold purchasing, foreign exchange, and reloadable Visa and MasterCard debit cards to customers who choose not to use, or don't have access to, traditional banks or financial institutions.
DFC Global has more than 300 check-cashing and payday loan locations in about 15 states, more than half of which are in Florida and California. Another key market is Canada, where the company owns more than 400 National Money Mart locations and is one of the largest check-cashing services providers.
Amid increased regulatory pressures in the US and market saturation in Canada, though, the firm has increasingly looked overseas for expansion opportunities. DFC Global has more than 500 offices in the UK, as well as locations in Finland, Ireland, Poland, Spain, and Sweden. Foreign operations now bring in more than 85% of the company's sales -- the UK alone accounts for about half while Canada accounts for some 30% of revenues. The acquisitive firm plans to continue expanding in Canada and Europe by entering new markets, buying franchised and third-party locations, and opening new stores.
Thanks to its rapid expansion, DFC Global's earnings have been climbing steadily since 2009. In fiscal 2012 its revenues grew 35% to $1.1 billion (although profits slipped 20% to $52.4 million. Growth in Europe primarily drove the increase in sales, as the company opened nearly 100 stores in the UK that year and made a number of acquisitions. Consumer lending, the company's largest business, grew in Canada and the US, as well. (Check-cashing revenues fell slightly, which is not entirely unexpected as prepaid debit cards seems to be taking that space in the market.) All other areas of the business grew in fiscal 2012, including pawn service fees, money transfer fees, and gold sales.
Where traditional banks have increasingly turned away from certain demographics (for example, by closing down underperforming branches or by raising minimum balance requirements), DFC Global sees opportunity for growth. As such, it has been aggressively expanding through acquisition, which allows it to easily enter new geographic markets. It then builds upon that growth by opening new locations in those markets. The company carefully examines the culture and needs of various underbanked regions to decide which of its brands and platforms will best meet potential customers' needs. It has also broadened its scope of offerings (such as Internet loans), a strategy it plans to carry forward.
DFC Global has been winding down the operations of its We The People franchise, which provides legal document processing services. The unit filed for bankruptcy in 2010 after being hit by two lawsuits from consumers who claimed it illegally advertised some of its services. Some franchisees then sued Dollar Financial and We the People for damages related to the consumer suits. – less