As the world watches jurors convict a Minneapolis cop for the murder of George Floyd and our city mourns the murder of Daunte Wright by Brooklyn Center police, the Twin Cities continue to reflect on the racism and institutional failures that cause the brutality of the death of black men on our streets.
The roots of systemic racism in Minnesota run deep, and much of it stems from economic inequalities, social inequalities, and marginalization. The poverty rate for black Minnesotans is 27%, compared to 7% for non-Hispanic white Minnesotans. Decades of economic neglect in BIPOC communities, racial red lines, and discriminatory banking practices have created a permanent underclass of Minnesotans.
As we count on the impact of racism in our community and hope for justice to be done, we must also recognize the role that the economy and the financial industry play in perpetuating a culture of division, stratification and disagreement. poverty. One of the reasons for this flawed divestment cycle is the lack of financial access for small businesses owned by BIPOC, which create community wealth, community investment and high paying jobs in our state.
Disparities minimize economic mobility
BIPOC business owners are grossly under-represented in our state, and these businesses often lack the visibility and access to financial services that white business owners take for granted. Traditionally, financial resources such as small business loans have been designed largely for businesses with collateral or cash. These disparities have minimized economic mobility among BIPOC Minnesota residents who live and work in communities facing economic challenges, creating a systematically uneven playing field.
Fairer and equitable small business loans can help reverse this trend and support the success and success of BIPOC business owners. Community Reinvestment Fund, USA (CRF), a Minneapolis-based not-for-profit community development finance institution (CDFI) is making progress in educating BIPOC business owners about the existence of sustainable alternatives to traditional sources of capital .
Earlier this year, I had the privilege of testifying before a state legislative committee regarding the division of racial wealth before the pandemic, the pandemic’s impact on BIPOC’s small businesses, and a fair way forward. The reality is that we need to reinvent small business finance for local small businesses that will need public and private support to bridge the disparities and usher in real transformative change.
Additionally, we need to reinvent the small business lending ecosystem through a lens that prioritizes equity and access while raising awareness among BIPOC-owned businesses to transform our economy. Communities are more equitable and stronger when the business community reflects the people it serves.
We need productive relationships and collaboration
We need to work together – the private sector, public officials, BIPOC business and community leaders, and the financial sector – to create unique, community-specific solutions to empower BIPOC-owned small businesses in Minnesota and twin cities. Collaborative partnerships such as The Catalyst Coalition, a new collaborative era of local CDFIs – nonprofit and mission-driven organizations dedicated to community finance – including Northside Economic Opportunity Network (NEON), Metropolitan Economic Development Association ( MEDA), The Latino Economic Development Center (LEDC), African Economic Development Solutions (AEDS) and CRF; or the Destination Northside Coalition and the Lake Street Rebuild and Reimagine Coalition are examples of the productive links established in our cities.
While the current economic crisis and the racial calculation have further revealed deeply ingrained social inequalities, it has also drawn attention to these disparities and highlighted the role we all play – inside and out. the financial services sector – to empower BIPOC communities to achieve financial stability, sustainability and success.
There is still a long way to go, but despite the discord we see and feel in the Twin Cities today, change is within reach.
Anisha Murphy, Esq., Is Twin Cities Community Advancement Director for Community Reinvestment Fund, USA (CRF), a mission-driven lender and CDFI based in Minneapolis. A native of Minneapolis, Murphy has dedicated his career to the pursuit of fairness, justice and community betterment. She is an Assistant Professor at Hamline University and Mitchell Hamline Law School, where she received her Juris Doctorate in 2013 and her Masters in Public Administration in 2016.
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