$ 8.7 billion aims to increase lending to black businesses
WASHINGTON – The US Treasury Department on Tuesday announced the release of $ 8.7 billion to help increase lending to small businesses and people belonging to minorities and to people living in poorer communities with limited access to banking services.
Funds from the Emergency Capital Investment Program, which was established this year, will go to 186 community financial institutions. Vice President Kamala Harris and Treasury Secretary Janet Yellen discussed the investments in remarks at the Freedman’s Bank Forum, which was hosted by the Treasury Department.
âThe wealth gap persists today, the property gap persists,â Harris said of the need for investment. “Black entrepreneurs are three times more likely to report that a lack of access to capital negatively affects their profit margins.”
Yellen pointed out that there would be a direct link between the money provided and businesses in local communities, saying she had recently met the owner of an Atlanta tea company called “Just Add Honey” who had not the financial credit to keep all of its stores open. during the pandemic.
âHere it’s very easy to relate politics to personnel,â Yellen said. “What this will do is prevent small business owners of color from closing two of their stores. And best of all, it will help people open two more.”
Black Americans make up 13.4% of the US population, but Federal Reserve figures show they only control 4.3% of household wealth. More than half of the wealth of black households comes in the form of pension rights, which cannot be passed on to future generations. This makes it more difficult for people living in predominantly black communities to qualify for business loans and mortgages.
The $ 8.7 billion will go to institutions in 36 states, as well as Guam and Washington, DC. About 54% of the funds will go to banks and 46% to credit unions.