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Source : Vice President
December 15, 2021
Author : Patty Rodriguez
The announcement came as the pair headlined the Freedman’s Bank Forum on Tuesday.
The funding comes as part of a $12 billion package pushed by VP Harris last year, called the Jobs and Neighborhood Investment Act, when she was in the Senate. Senators Cory Booker, Chuck Schumer, Mark Warner and Representative Maxine Waters also championed the bill.
“I am very proud to announce that almost $9 billion is now available to increase lending to small businesses in underserved communities,” Harris said at the event. “That’s a lot of dough,” she added.
“These $9 billion will dramatically increase the work of more than 175 community lenders across our nation,” the Vice President added.
Ironing out the details, Secretary Yellen said that the funding will be granted from the Emergency Capital Investment Program (ECIP) and be handed to “community development financial institutions and minority depository institutions.”
“The CDFIs and MDIs serve communities the financial sector historically has not served well. And most of the time, these are communities of color,” Yellen continued.
“If you are Black or Hispanic or Asian or a Native entrepreneur, we know it’s harder to get your hands on funding to open a shop or to keep the lights on or to meet customer demand. And this has been particularly true during the pandemic,” Secretary Yellen said.
Secretary Yellen cited a recent Small Business Credit survey from the Federal Reserve which found that 40 percent of white-owned firms received all of the emergency funds they requested last year, but the number of Hispanic-owned firms that received all the funding they sought was 21 percent, while only 13 percent of black-owned firms got what they requested.
Meanwhile, it’s much less likely that black businesses can get a loan from a bank compared to their white counterparts. According to the Federal Reserve, black-owned businesses are 20 percent less likely to get a loan from a bank, so community lenders serve an essential role in getting capital to disadvantaged businesses.