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NerdWallet: Racial Funding Gap Shows Black Business Owners Are Shut Out From Accessing Capital

NerdWallet, January 8, 2021, Racial Funding Gap Shows Black Business Owners Are Shut Out From Accessing Capital

Data breakdown on the racial funding gap: BIPOC business owners are at a disadvantage when it comes to financing.

A study by the National Community Reinvestment Coalition found that bank representatives at 32 bank branches in Washington, D.C. treated white and Black (as well as male and female) business owners who came in seeking a Paycheck Protection Program loan differently. The study recorded differences in levels of encouragement, a difference in the products offered and a difference in the amount of information provided. White males received the most information about the program, on average, while Black women received by far the least.

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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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