Don Foster MP writes… Access to finance for ethnic minority businesses

Liberal Democrats want to create a Stronger Economy in a Fairer Society. In order to do this it is vital that no one section of society is unnecessarily prevented from starting a new business should they wish to do so. However, evidence suggests that people from black and minority ethnic (BAME) backgrounds are often keen to start a business but for a variety of reasons don’t go through with it. The National Audit Office estimates that the cost to our economy from the failure to fully use the talents of people from our ethnic minority population could be more than £8 billion annually.

So I am delighted that Nick Clegg is today launching the DCLG report on Ethnic Minority Businesses & Access to Finance. This report follows a thorough review into issues facing BAME access to finance undertaken by my predecessor Sir Andrew Stunell and me. This report follows lengthy and productive discussions between my predecessor Sir Andrew Stunell, myself and the British Bankers’ Association about ways in which we can improve the experience of people from BAME communities seeking capital to start a business.

During the course of our research we found a number of problems facing people from minority communities who wished to start their own business. There is a perception of discrimination, amongst some would-be BAME entrepreneurs in accessing finance as well as the perception that professional support services are intimidating, lack cultural sensitivity and understanding of ethnic minority markets.

The report provides detail on the number of policies we have introduced, following our fruitful discussions with the banks and financial institutions to improve the situation. I am delighted that we have been able to agree such a list of proposals that will hopefully improve the experience of the BAME business community and increase the number of start ups. The British Bankers’ Association as well as the banks and financial institutions themselves have recognised the issues facing the BAME community and have worked hard alongside myself and Andrew before me to come up with a number of creative solutions. The report has several proposals which amongst others include arranging a series of roadshow events on access to finance and investment focusing on areas with high ethnic minority populations, more assistance for people who have failed to gain access to finance first time round, engaging with ethnic minority business groups to ensure a continued dialogue on issues around access to finance, and include ethnic minority business representation on the Association’s Business Finance Roundtable.

It is wonderful to see the report launched by Nick today following all the hard work and long hours that went into making it a reality. I believe this report will result in a better relationship between the banks and entrepreneurs from ethnic minority communities, turning their solid business ideas into a reality and stimulating further growth throughout the UK.

* Don Foster is MP for Bath, Liberal Democrat Chief Whip and Coalition Deputy Chief Whip.

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8 Comments

  • Very interesting!

    I wonder, is there a link between business start-ups and low cost housing, and perhaps wealth?
    For example, many friends only started businesses seriously when they had low cost housing – either when v young and living with parents (rent free, low risk) or once they had bought a house and had paid off a large part of the mortgage and built up savings (again, low living costs and low risks).

    Taking into account the high risks involved in a start-up business, a low risk funding model seems to be an important, essential component.

  • Helen Dudden 30th Jul '13 - 9:15pm

    The low cost housing does no longer apply, there is no low cost housing.

    With the steady increase in cost, for what was the social housing, which is sadly no more. We only have have “Affordable Housing” in the true meaning of a reformed social housing.

    This for many of us is only what is on offer, I dread my bills for the flat I live in, not insulated and very cold. Struggle is the only word I know, I never thought that being a pensioner and widow could be so difficult.

  • Helen Dudden 30th Jul '13 - 9:32pm

    Don what this Government is doing on the subject of bedroom tax makes me want to cry.

    I know what it feels like to be stuck in accommodation that is not good.

  • We do already have a mechanism which should allow this , which is the support already provided through the state such as HB – although these are under threat.

    The jobseekers allowance should really be increased to the Minimum Income Standard, and then re-named “The Job Creator’s Allowance.” 😀

  • Helen Dudden 30th Jul '13 - 9:54pm

    I am a pensioner, and also a widow, I feel this whole situation is so uncaring.

  • Helen Dudden 31st Jul '13 - 2:27pm

    Could I add one further comment.

    At a recent meeting on equal marriage one of your MP’s remarked that Kosher food is strange, I did explain the ideas on the subject.

    My final word, equality works across the board, religion has the same respect whatever, unless, it is breaking the law then it becomes a different subject.

    Actually, I do mainly stick to vegetarian, a much kinder option to those who are considered meat.

  • The difficulty of accessing finance for small business is not confined to those from BAME backgrounds – it is the experience of almost all small businesses. Those involved, whether in private sector banks or state agencies, are typically more concerned at protecting their butts and ticking boxes than anything else and it’s not obvious how a few more roadshows or ‘continued dialogue’ will help.

    I have no doubt whatsoever that the motivations behind this are entirely praiseworthy but would it not be better to focus on fixing the availability of finance generally? Of course, responsibility for that may lie outside Don’s Department so he is left to do what he can.

  • Helen Dudden 31st Jul '13 - 8:07pm

    It should be across all borders as I have stated.

    Religion is a very personal choice, and I think that we all should be aware that it can cause upset when there is a critical comment made, on the way you choose to live your life.

    Unlike some of the comments made on Israel, I can’t answer for what someone else has done, nor should I.

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