New research from the Black Business Network highlights a ‘trust gap’ between the Black business community and two of the biggest institutions in the UK, banks and the government.
The report based on research by the Black Business Network which was sponsored by Lloyds Bank, surveyed more than 800 participants from Black communities in Britain, with the majority (65%) being female, to arrive at their conclusions.
The stats in the research make for a disheartening read. When it comes to trust, less than half (43%) of Black entrepreneurs’ trust banks to have their best interests in mind. While trust in banks is low, Black business owners also revealed their sentiment towards the political players of the country. Only around a quarter (27%) trust the national government to have their best interests in mind.
Sadly, the gaping trust gap between the Black business community and banks and the government takes a real toll on the growth of Black businesses. The low level of trust in banks is influencing Black business owners’ borrowing habits who are far more likely to self-finance their business (34%) than use financing from banks (13%). This means entrepreneurs are not only missing out on financial support from traditional lenders, but also access to mentoring and business networks that banks can provide.
The causes for this lack of trust runs deep, if not unsurprising. More than half (53%) of those surveyed revealed that they have experienced negative societal discrimination, but by far the biggest factor appears to be the lack of empathy and understanding these institutions display toward Black businesses. The business owners (79%) cited the importance of sources of support understanding their culture and lived experience.
While Black businesses are suffering the consequence of this status quo, ultimately the UK economy is the biggest loser. Research shows that the ‘Black pound’ holds significant value, with firms owned by people of African and Caribbean origin contributing a whopping £25 billion annually to the British economy. Imagine what could be achieved with the right funding and support.
In an effort to reverse this current situation, Lloyds Bank is working with their Black Business Advisory Committee to create a set of recommendations to increase the trust of Black business owners. These include partnering with local communities to gain trust, collaborating with schools and universities to encourage entrepreneurship and creating a bespoke mentoring programme.
Founder of Black Business Network and member of the Black Business Advisory Committee, Shari Leigh, said: “For the Black business community these findings are nothing new. The legacy of ties to the slave industry and unaddressed structural racism remain at the forefront of conversations within the Black British community.
“It’s commonplace to balance the idea of want versus need when engaging with traditional financial institutions, questioning the importance of our feelings and visibility. It just shouldn’t be this way.
“We use, work for and contribute to these institutions and we should be seen and heard. This research is important because it quantifies Black business communities’ unapologetic thoughts and experiences and outlines tangible steps that Lloyds Bank and other institutions can take to address this lack of trust in real, tangible ways.”
Managing Director, SME and Mid Corporates, Lloyds Bank Commercial Banking, Paul Gordon said: “Banks have a vital role to play in creating a more diverse and inclusive business community in the UK which will benefit the country. We know we still have a long way to go, and this is not an easy fix or a matter of better signposting what we do. We are committed to large-scale change and collective action to help pave a way for Black-owned businesses to thrive.”