BME businesses need access to finance

The importance of small business being able to access funding in Britain is crucial for our growing economy, but recent rules by the Bank of England could lead to a several foreign-owned retail banks to close down, a worrying thought for many ethnic minorities.

Leading Asian Entrepreneur Dr Rami Ranger has challenged the Bank of England’s wisdom on minimizing retail services from banks outside the European Economic Area, arguing how it could potentially ‘harm small BME businesses’.

Dr Ranger who is the founder of The Sun Mark Food Company argued how he relied greatly on Indian Banks due to them being able to understand his needs. Many other entrepreneurs including businessman Kirit Patel, have argued how the new rules could penalise ethnic business that tended to rely on Asian Banks for lending when starting up.

The new regulations by the Bank of England’s Prudential Regulatory Authority state that any deposit taking foreign bank that wants to remain a branch must have less than £100 million in account balances and fewer than 5,000 customers.

Dr Ranger has argued how these ‘draconian measures’ set out by the central bank could have far- reaching implications on the economy:

Less competition and higher charges in the market will affect a segment of businesses that rely on Indian Banks and in the long-run; these business will be unable to expand”.

For him it’s a recipe for disaster, as it could lead our economy into deeper recession.

These regulations set up by the Bank of England have been criticised by many as acting as barriers to ethnic minority success. Whilst statistics have showed that high street banks’ lending to small firms is on the rise, many entrepreneurs like Kirit Patel have argued that Asian banks were more willing to lend if family members acted as a guarantee, which is not the case for UK banks. These banks have been catered for customers’ needs and many leading business in the country have used these banks to make there breakthrough into the market.

The banks have enabled ethnic minorities to achieve their dreams, and Dr Ranger believes they have allowed individuals to become an asset to our nation and economy. With sluggish growth, small business success may be hindered by new bank regulations and damage the economy.

Roshni Vekereya