Nonprofit Quarterly: JPMorgan Chase expands business lending program in communities of color
Nonprofit Quarterly, February 15th, 2019, JPMorgan Chase expands business lending program in communities of color
A study conducted by the National Community Reinvestment Coalition found that banks were twice as likely to offer white entrepreneurs help with their small business loan applications compared to Black entrepreneurs, and three times more likely to invite follow-up appointments with white borrowers than better-qualified Black borrowers.
The need for a focused, well designed, and sufficiently capitalized initiative for entrepreneurs of color is particularly important for the District of Columbia, where businesses owned by people of color comprise 34 to 41 percent of all businesses and 18 percent of those in neighborhoods of color. While incubators and accelerators are providing some support helping entrepreneurs of color gain access to new customers, only five out of 90 resources in DC identify as focusing on this field, with the capacity to serve about 350 owners.
In sum, JPMorgan Chase’s new focus on entrepreneurs of color is sorely needed and its programmatic model of partnering with experienced CDFIs as their interface makes good sense. It needs to share what it is learning from these experiments with the broader policy, investing, and practitioner communities, given the complex and deep-rooted set of factors that make it so very difficult for businesses of color to launch, survive, and thrive.—Debby Warren