Minority entrepreneurship in Philadelphia

Business Ownership ChartAt the national level, disparities in the proportion of minority-owned and white-owned businesses have been narrowing over time. A 2012 survey of business owners indicated that while nearly 71% of businesses were white-owned, black and Hispanic entrepreneurship increased from 7.1% and 8.3% in 2007, to 9.5% and 12.2%, respectively. Unfortunately, the number of black and Hispanic-owned businesses in the Philadelphia metro area is less reflective of the diversity of its population. While the population of the area is 21.2% black, only 2.9% of businesses are black-owned. A smaller gap in population and business ownership exists for Hispanics, who make up 7.8% of the population, and only 2.2% of business owners.

Race by quartile smAsian-owned businesses constitute a much higher percentage in the area, with 11.2%, and only 5.4% of the population. Unfortunately, the disparity does not end there. NCRC conducted an analysis of business lending by banks in the Philadelphia metro area. All reported business lending in the Philadelphia metro area from 2012-2016 was analyzed, and we found that a much higher proportion of the number of loans went to neighborhoods with white and Asian- majority populations. Philly LendersWhite and Asian-majority neighborhoods were in the top quartiles of the number of business loans received 63% and 66% of the time. Black neighborhoods fared much worse in access to business lending, with 73% of neighborhoods being in the bottom quartile of loans received, while Hispanic neighborhoods were in the bottom quartile 55% of the time. This indicates indicated large disparities in the availability of capital for black and Hispanic entrepreneurs.

In addition to racial disparities in lending, NCRC examined the number of business loans made in low-to-moderate and middle-to-upper income neighborhoods, finding that 78% of business lending flowed to middle-to-upper income neighborhoods. Only 7% of business loans went to low income areas of the metro area.

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Redlining and Neighborhood Health

Before the pandemic devastated minority communities, banks and government officials starved them of capital.

Lower-income and minority neighborhoods that were intentionally cut off from lending and investment decades ago today suffer not only from reduced wealth and greater poverty, but from lower life expectancy and higher prevalence of chronic diseases that are risk factors for poor outcomes from COVID-19, a new study shows.

The new study, from the National Community Reinvestment Coalition (NCRC) with researchers from the University of Wisconsin–Milwaukee Joseph J. Zilber School of Public Health and the University of Richmond’s Digital Scholarship Lab, compared 1930’s maps of government-sanctioned lending discrimination zones with current census and public health data.

Table of Content

  • Executive Summary
  • Introduction
  • Redlining, the HOLC Maps and Segregation
  • Segregation, Public Health and COVID-19
  • Methods
  • Results
  • Discussion
  • Conclusion and Policy Recommendations
  • Citations
  • Appendix

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