Is there ethnic discrimination in the UK market for small business credit?
Fraser, Stuart. (2009) Is there ethnic discrimination in the UK market for small business credit? International Small Business Journal, Vol.27 (No.5). pp. 583-607. ISSN 0266-2426Full text not available from this repository.
Official URL: http://dx.doi.org/10.1177/0266242609338756
A large-scale survey of UK small business finances is analysed for evidence of ethnic discrimination in the credit market. A summary analysis of credit outcomes (loan denials, loan interest rates and discouragement) reveals large differences across ethnic groups with Black and Bangladeshi businesses, in particular, experiencing poorer outcomes than White and Indian businesses. Econometric analysis indicates that ethnic differences in denial rates and interest rates can be explained by variations in non-ethnic risk factors such as missed loan repayments and overdraft excesses. This suggests there is no ethnic discrimination in credit markets. However, ethnicity appears to influence whether business owners felt discouraged from applying for loans even after controlling for differences in loan application costs and risk. This suggests some ethnic groups may be affected by misperceptions of ethnic discrimination. The implications of these findings for UK policy are discussed.
|Item Type:||Journal Article|
|Subjects:||H Social Sciences > HF Commerce
H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
|Divisions:||Faculty of Social Sciences > Warwick Business School > Centre for Small & Medium-Sized Enterprises
Faculty of Social Sciences > Warwick Business School
|Journal or Publication Title:||International Small Business Journal|
|Publisher:||Sage Publications Ltd.|
|Number of Pages:||25|
|Page Range:||pp. 583-607|
|Access rights to Published version:||Restricted or Subscription Access|
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