Are Circles too Strong to be Broken?

Our assignment last Thursday was: going in the community to find out about what is the relationship between poverty in Toronto and the "informal lending sector"?

This assignment was also a great way to get us out of our comfort zone, a way to make us explore and create contact with the community, a way to open our eyes on poverty surrounding us… a way of bridging the gap and realizing that their reality is not so different than ours, that their reality could be ours or someone’s we know and love.

So we broke into three teams: Binnu and Jordan went to small bars, alleys and money marts; Don and Lisa explored the mysterious world of pawnshop and chatted with people on the street; while Bernard and I visited shelters. What an amazing day it was. After many hours outside, we met back home and talked about our days and shared our reflections, trying to see the trends and connections.

Here is a summary of our findings:

“My view of pawnshops prior to this assignment was solely as a place to unload stolen goods. Admittedly this was a narrow-minded view and based off of zero first-hand experience and the reality of the situation is obviously a little more complex. We spoke to both pawnshop owners and people living on the street to get different perspectives on the issue and the opinions we received were varied. While the view from the homeless people we spoke to fit more into my previously held view, the owners all felt they were just providing a much needed service to community members. Some usage highlights that I'd never considered:

• Using a pawnshop as a storage facility: If someone is going on vacation for a few weeks, they sometimes sell valuable items to a pawnshop to keep them safe while they're away. Apparently this is a cheaper alternative option to safety deposit boxes at a bank.
• Using a pawnshop as a loan center: By using material goods as collateral, people are able to get small, short term loans at much lower interest rates than credit card companies, banks, or other lending institutions.

Overall, I've realized these shops aren't inherently good or bad – they're just a tool that can be used by people in whatever manner they wish – and they do provide a needed service to different parts of a community. Do they contribute to the vicious circle of urban poverty in Toronto? Yes, they can, but so do all the major financial institutions in the city. It's really about how they're used that's important as opposed to their actual existence.”

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Don and Lisa

“We started with a naïve and simple hypothesis: Places like money mart make people go deeper and deeper into poverty. In just a few of hours of roaming around some sketchy neighborhoods we found amazingly resilient people with powerful stories and a strong community with so many layers of connections that it made money mart seem insignificant.
One of the people we met – let’s call him Dan - was standing outside a bar and reading a book. He had run bail and was living on disability payments. Talking to him there on the sidewalk, and watching him wave to all the passersby and have short friendly exchanges, I felt like the community had taken him in and he was part of this tight family. He talked about how he could get ten bucks from anyone on the street there and not worry about any interest. Then Dan showed us some scars from when he didn’t pay back, “… and this was for only three dollars…” Money mart seemed like a distant insignificant reality.
On the other extreme, we chatted for an hour with a former Oxford school of economy graduate who mentioned how the mafia are also lenders in the community, and how they make sure payments are made with the threat of broken bones.
Our day ended with an amazingly resourceful man who would buy things that homeless people had scrounged up, and then sell those items on the street. What a one-man economy generator! He helped the homeless get an income, while making money for himself and providing the residents cheap alternatives to buying phone chargers at a Bell store!
I came away with a feeling of awe. There are so many transactions and support systems invisible to a person who lives in the safe confines of a 9-to-5 job. I know my emotional high is just the honey-moon phase of getting to know a really rich community and I’ve still only seen the positives on the surface. But I am really glad that it has shaken my simple assumption that money mart was one of the very few options that people in these communities have.”
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Binnu and Jordan


“I got up on Thursday morning not quite sure what my day would be like, turn my computer on and read the assignment…then thought: what were we going to do with this, which approach should we use to get some answers? I wanted to know if the shelters were offering an alternative to borrowing money. So we started our quest by trying a few things, like inviting someone on the street to come have a coffee with us, going to a couple of shelters and asking questions, we even bought cigarettes to be able to bond. Man are cigarettes expensive!! It’s -20 deg Celcius outside and it’s quite windy, so the shelters are super busy and the people on the streets are trying to get some money, so we realize fast enough that our approach was not the right one. We ended up walking to another shelter and offer to help instead of simply asking questions. We met three women working there, had great talks with them, had a visit of the building and volunteered at night for a few hours. One thing I realized is how genuinely nice and friendly everyone was. Throughout the day, we asked a few questions regarding our assignment. We found out that the main link between poverty cycles and money is often a lack of education or knowledge on managing it, how to do a budget and respect it. We all have more needs than we can afford, we all have debts, either for a mortgage, a car or because of school, we use our credit cards and sometimes can’t pay them…we are no exception to this vicious consummation and false needs circle, but one main difference is that we have the ability to work more and get out of it, we have the ability to realize at some point that we can’t spend our monthly income in a few days…they often don’t have that chance: Drug addiction, mental problems, having no family or friend supports, no one to help them out, loneliness, repeating patterns, are some of the root cause of poverty in Canada. The shelters are offering mentoring, friendship, support, trust, food, showers, beds… they can’t force or impose anything, but they can help finding the weak link in the vicious circle to find a way out of it. Sometimes it works, sometimes it doesn’t; truth is vicious circles are hard to break. I’ll go back next week to volunteer, I was touched and want to get more involve within my community, there is a lot to be done and we both had an amazing time.”
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Genevieve and Bernard

What conclusions did we draw?

We came to the conclusion that poverty circles and informal lending sectors are linked to a certain extent; money mart, pawnshops, the mafia are certainly opening a door to vicious circles (steeling, violence, borrowing more) but at the same time they are offering a way out of it. I guess that just like anything else it depends on how and why they are being use.

If nothing else we learnt a lot on how to approach strangers and ask them intimidating and personal questions on how they deal and manage their money. All this will be pretty useful in our placement.

So that’s it for today, we have the weekend off, so we went out last night and had tons of fun, we danced and laughed… slept in this morning and had a great breakfast. I’m on my way to discover Toronto.

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