Is There Ethnic Discrimination in the U.K Market for Small Business Credit Against Black People?
Is there Ethnic Discrimination in the U.K Market for Small Business Credit against Black People?
Introduction
Discrimination is the act where one is making a distinction in favour or against an individual by segmenting them in categories of age, gender, colour, religion, sexuality or disability. The first Discrimination Act that was placed in England to give everyone equal opportunities was the Race Discrimination Act in 1976. “Racial discrimination defines a person by referencing them in categories of colour, nationality, national and ethnic origins”. (Townshend- Smith on Discrimination Law, Text, Cases and Material. Second Edition, Michael Connolly Page 137).
Immigrants that come over to the U.K because of hardship and wars in their own countries found there was not much equality and where being treated and classed as second class citizen. Equality over issues such as equal pay, employment, education, housing, voting rights and desegregation were battles that continued for years. (
The aim of this essay is to examine if black people in the U.K market for small businesses taking credit are being discriminated against. “The population of the U.K in 2000- 2001 was near to 60 million. With one person in fourteen being of an ethnic Minority group (7.1%). With the highest Ethnic being black people of 1.3 million. (Townshend- Smith on Discrimination Law, Text, Cases and Material. Second Edition, Michael Connolly page 3).
A large survey of the UK small business finances was analysed for evidence on ethnical discrimination in the credit market. The credit outcome analyses showed there were differences across ethnical groups with Black and Bangladeshi businesses being treated differently with poorer outcomes rather than white and Indian businesses. However an econometric analysis suggests that this is to do with in denial and interest rates and is a non ethnical matter determined on factors such as missed loan repayments and overdrafts. Suggesting there is no ethnical discrimination in the credit market against black people as it is determined on statistics such as missed loans and overdrafts.
Statistics show that loan denial, which is when a business has been denied any loan outright, black African have the highest percentage of 36 and white people have 8.2%. Again discouragement which is whether the owner felt discouraged from applying for any loan, again black African have the highest with 43.8% and white people again having the least with 4.2%.
More secondary research from Stuart Fraser, International Small Business Journal 2009, shows financial delinquency which is when a business exceeds overdraft limit or failed to make any loan repayments again black Caribbean and Africans have the highest with 40.6% and 55.7%. Proving again that black people are not being discriminated