Less than half of black entrepreneurs trust banks
Financial institutions are lacking in the black business community, as less than half (43%) of black entrepreneurs trust banks to have their best interests in mind. The results are based on research from the Black Business Network sponsored by Lloyds Bank and businesses by Savanta. More than 800 participants from black communities in Britain responded to the survey, the majority (65%) of whom were women.
The survey highlights a trust gap between the black business community and two of the UK’s biggest institutions: banks and government. While confidence in the banks is low, black business leaders have also revealed their sentiment towards the country’s political players. Only about a quarter (27%) trust the national government to have their best interests in mind.
This low level of trust in banks influences the borrowing habits of black business leaders. They are much more likely to be self-financing (34%) than to rely on bank financing (13%). This means that entrepreneurs not only benefit from the financial support of traditional lenders, but also from the access to mentorship and business networks that banks can provide.
Reasons for this include the importance Black business owners place on sources of support that include their culture and lived experience (79%). Another reason for these results is the way black entrepreneurs are treated. More than half (53%) of black business owners have experienced negative social discrimination.
Although it feels alienated from the UK’s main institutions, the ‘black pound’ holds significant value, with businesses owned by people of African and Caribbean descent contributing Â£ 25 billion a year to the economy. British. This further explains how the needs of black business owners are not being met.
Based on this research, Lloyds Bank worked with its Black Business Advisory Committee to create a set of recommendations aimed at increasing the confidence of black business owners.
These include partnering with local communities to gain trust, working with schools and universities to encourage entrepreneurship, and creating a tailor-made mentoring program.
Shari Leigh, founder of Black Business Network and member of the Black Business Advisory Committee said, âFor the black business community, these findings are not new. The legacy of ties to the slave industry and untreated structural racism remain at the forefront of conversations within Britain’s black community.
âIt’s common to balance the idea of ââwant and need when engaging with traditional financial institutions, questioning the importance of our feelings and visibility. It just shouldn’t be that way.
âWe use, work for and contribute to these institutions and we need to be seen and heard. This research is important because it quantifies the shameless thoughts and experiences of black business communities and describes concrete steps Lloyds Bank and other institutions can take to address this lack of trust in real and tangible ways.
Paul Gordon, Managing Director, Small and Medium Businesses, Lloyds Bank Commercial Banking said: âThese results make reading uncomfortable, to which we cannot and will not back down. We’re taking steps to better understand the needs of Black colleagues and clients through our Race Action Plan and by working with our partners, including the Black Business Network, Foundervine, and the Black Business Advisory Committee.
âBanks have a vital role to play in creating a more diverse and inclusive business community in the UK, which will benefit the country. We know we still have a long way to go, and it’s not an easy fix or a matter of better reporting what we’re doing. We are committed to leading large-scale change and collective action to help pave the way for black-owned businesses to thrive. “