You can easily make this from a t-shirt. The fringe is the bottom portion that has been cut in strips, (from side to side so it will stretch), and then sewn onto the top part. Fun and easy.
Stitched & Patched Denim Bag Pattern Download from e-PatternsCentral.com -- Here's a great way to combine embroidery practice stitchouts with an old pair of jeans to create this fun bag.