Bloomberg News

Britain Probes Banks’ Failure to Lend to Black Businesses

November 24, 2011

Nov. 24 (Bloomberg) -- U.K. Deputy Prime Minister Nick Clegg ordered an inquiry into lending by British banks to black and ethnic-minority businesses after evidence suggested they are being discriminated against.

Local Government Minister Andrew Stunell and Equalities Minister Lynne Featherstone, who is already investigating bank lending to women, have been asked to probe possible discrimination on grounds of race, Clegg will say today.

“Past evidence shows that firms owned by individuals of Black African origin have been four times more likely than so- called ‘White firms’ to be denied loans outright and that Bangladeshi, Pakistani, Black Caribbean and Black African-owned businesses have been subject to higher interest rates than White and Indian owned enterprises,” Clegg will say in a speech in Brixton, south London, according to extracts released by his office. “Anecdotally, we hear this is a problem time and time again.”

Clegg will say that while 35 percent of people of Black African origin say they want to start a business, only 6 percent manage to do so. Featherstone and Stunell will research whether they are being held back by difficulties in obtaining bank loans and what the barriers are.

“Britain’s banks, bailed out by the British people, have just as much responsibility as everyone else, arguably more responsibility, to help Britain build a strong and dynamic economy,” Clegg will say. “Unleashing black and ethnic- minority talent is their duty too.”

--Editors: Eddie Buckle, Francis Harris

To contact the reporter on this story: Thomas Penny in London at tpenny@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net


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