A Government report has cleared banks of racist lending policies after deputy prime minister Nick Clegg raised concerns more than 18 months ago.
In November 2011 Clegg questioned why black entrepreneurs had more difficulty in accessing loans and ordered an inquiry into whether banks ran discriminatory lending policies.
The report found people from ethnic minorities were more likely to have a loan application rejected than white people, but that there were legitimate reasons for this.
The reasons listed in the report include a higher percentage of collateral shortages, poor credit worthiness, less formal savings, poor financial track records, a perception of discrimination by banks and language barriers.
It states: “There is no evidence to indicate that disparities are due to racial discrimination per se, but variances could be accounted for by other business characteristics. This conclusion is based on a variety of survey evidence of businesses, with robust sample sizes.”
The British Bankers’ Association has agreed to take action to boost ethnic minority lending on the back of the report.
It will launch mentoring programmes for specific ethnic minority groups, engage with ethnic minority groups, fund research into ethnic minorities and loans and launch an ethnic minority committee for business loans.