It's Time for Banks to Treat Black-Owned Businesses Fairly
The essay below was written by Yla Eason, assistant professor of professional practice in marketing at Rutgers Business School. She was among the faculty members from across Rutgers University who contributed to a collection of pieces Rutgers Today published to commemorate Black History Month.
In a recent report by Citibank, their research revealed startling facts about the cost of discrimination. When I read that “not addressing racial gaps between Blacks and whites has cost the U.S. economy up to $16 trillion over the past 20 years,” I was stunned.
First, I was amazed that Citibank would begin to explore racial financial discrimination when banks are often contributors to this malaise. I knew research by the late Rutgers professor Jerome Williams revealed that the actual treatment of Black-owned businesses seeking small business loans from banks “is consistently poor” and “significantly inferior in critical ways.”
Second, it made me think of the harsh criticism I often hear that generally starts with: “Why don’t Black people own more businesses?” I bristle at this question because it assumes a level playing field exists for those of us who do start businesses. Too often we discover the strange ways our efforts to create wealth through individual ownership of the means of production – basically capitalism – is thwarted by the very institutions that would benefit from it.
As a Black woman business owner who started a toy company in 1985 and grew it to $5 million in sales, I sadly learned that my revenue achievement put me at the top 3 percent of Black-owned businesses. While proud of my accomplishment, it was a stark reminder that our upper level was a lower-middle range for white-owned businesses. The lack of access to capital is one of the reasons for this disparity.
As the report summarized, “providing fair and equitable lending to Black entrepreneurs, might have resulted in the creation of an additional $13 trillion in business revenue and potentially created 6 million jobs per year.”
It’s not too late to change.
Press: For all media inquiries see our Media Kit