Hideously diverse Britain: Who looks like a good bet?

Reprinted from Hugh Muir's column -  Guardian. co. uk

African/Caribbeans struggle to get bank loans. Discrimination – or proof that banks help those who help themselves?

Damn those bankers. There's a popular phrase. And furthermore, explain that, I say to Professor David Smallbone, pointing at the stark green bars on the chart in front of us. It is an unfair demand. He's not a banker and it's not his fault. Still, he does know quite a bit about it.

The graph is not new, but what it clearly shows is a pecking order. Different people from different backgrounds with similar business aspirations go to their banks for a loan. And what we learn is that if you are Chinese, you have quite a good chance of getting it. If you are Indian, you are next in line to get lucky. A Pakistani might be the next to benefit. Then a Bangladeshi; they have roughly the same chance of success as a white British applicant. But if you are African/Caribbean. Well, your chances aren't so hot. Sorry.

Plain discrimination isn't it, professor? Africans and Caribbeans appear to suffer disadvantage, he replies. Especially as those African/Caribbeans who apply are educated to the highest standard of any ethnic group. And a higher proportion hail from the second and third generation in this country. On paper, they should have more chance of getting a loan. So it's obvious discrimination, right? No, says the professor. It's complicated.

We can't know the extent to which lenders may be influenced by stereo-types or prejudices when mulling over who is and who isn't a bad risk. But some things we do know. We know that when academics examined the applications for start-up funds, the Chinese seemed best prepared, having marshalled the right advice from inside and outside their communities. Other groups could show tangible evidence of help from advisers, mentors etc. Some could cite a supportive mosque. By contrast, the African/ Caribbean applicants seemed less well prepared, much less supported. There is expertise and success in those communities, the professor says, quite a bit of it, but in comparison with other groups, that expertise isn't being shared to best effect.

Stereotyping is a given. Everyone does a bit of it. But for the most part, banks help those who help themselves.