No, you can't take out a loan on cabbages, and don't count on having a lot of sweat equity in those tomatoes at the bottom of your refrigerator. But I've been reading a few articles recently about Kroger (NYSE:KR) growing its financial services business, so Foolish readers might like to get up to speed.

Broad-line retailers like Wal-Mart (NYSE:WMT), Target (NYSE:TGT), and grocers of all stripes have been in the brand extension business for a long time, offering everything from rug cleaner rentals to propane tank exchange. When you're in the business of selling a lot of stuff at low margins, getting a few extra dollars out of your customer can make a big difference.

One of the first retail forays directly into financial services was when Sears (NASDAQ:SHLD) jumped into the game with both feet in the 1980s. The idea made logical sense, to build on a brand (and all that traffic) to sell more stuff. The company eventually realized there aren't a lot of synergies between washing machines and mortgage banking; it sold or spun off its interests in Dean Witter, Allstate, and Coldwell Banker in 1993.

Years ago, a trend emerged to establish branch bank locations in retail outlets. This has been a big win for retailers, banks, and consumers. Consumers got convenience, banks got better access to their customers, and retailers generated some income from renting out inexpensive space in the front of the stores.

More recently, Wal-Mart was thwarted in its efforts to buy an industrial bank based in Utah after massive opposition from politicians, consumer groups, and industry lobbyists. Wal-Mart's major goal is probably to reduce its massive credit card processing fees, but the image of that smiley face taking over the banking industry has been too much for regulators to swallow.

Which brings me to Kroger, which has quietly expanded its offering of financial services since the Kroger Personal Finance business was launched in 2004. The company has a kind of funky website with a big banner exclaiming "What a Great Idea!" There you can sign up for all kind of offerings, including a MasterCard laden with rewards, home mortgages, identify theft protection, and all kinds of insurance.

It doesn't take long to discover that none of these financial products actually originate with Kroger. Instead, the company has formed alliances with a variety of financial service providers, including Royal Bank of Scotland and Petfirst Healthcare.

So is there truly a worthwhile business proposition in all this? The answer is yes and no. The co-branded credit card is a no-brainer. It reduces credit card processing fees and surely feeds Kroger's powerful customer database, an enhancement to traditional loyalty programs. Still, I was disappointed to notice a 3% charge on balance transfers (in the fine print) and that purchases made at Kroger Family of Stores Fuel Centers don't count toward customers' Reward points.

The rest strikes me as a mixed bag. Take pet insurance, for example. Typing that phrase into any search engine quickly returns at least half a dozen companies just dying to offer all kinds of coverage on my golden retriever. Am I more likely to buy it from Kroger just because I also buy my dog food there? Is this a strategy to build traffic and enhance satisfaction with the Kroger brand? Or is the company just earning a commission on the referral?

Although I was pleased to discover that pre-authorization is not required for a visit to the veterinarian, I don't see a lot of synergy here. I searched last year's annual report and couldn't find any mention of financial services, except a discussion of the benefits of the loyalty program.

I think Foolish investors should focus on Kroger's surprisingly strong traffic and comparable-store sales growth in recent quarters. Perhaps the ancillary services are adding a tad to the results. But faster checkouts, fresh produce, and smiling employees light my fire more than Kroger as my financial services provider.

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Fool contributor Timothy M. Otte surveys the retail scene from Dallas. He welcomes comments on his articles, and owns shares of Wal-Mart, but none of the other companies mentioned in this article. The Fool has a disclosure policy.