Financial inclusion of Black, Asian and minority ethnic communities in the UK
In the financial system, people from Black, Asian and minority ethnic backgrounds face greater financial exclusion. There are multiple issues in the entrenched design and behaviours in the system that contribute to this. These must be addressed to achieve equity of outcomes for all ethnic groups. The headline data shows many specific disadvantages
- Black African and Black Caribbean groups are 4x and 3.5x more likely to be denied a loan respectively compared to White groups
- Black, Asian and minority ethnic communities have significantly lower levels of savings or assets than White British communities. For every £1 of White British wealth, Pakistani households have around 50p, Black Caribbean around 20p, and Black African and Bangladeshi around 10p
- More than one-fifth of fraud victims who stated they did not have their money returned were from minority ethnic groups, despite comprising only 10% of the fraud victims
- When accessing consumer credit, minority ethnic households face barriers that make them less likely to have financing than White households with similar income levels and other demographics (such as employment, education, and age)
- Minority ethnic groups are amongst the most financially impacted by the Covid-19 lockdowns. Higher proportions of Black, Asian, and minority ethnic communities are leaving employment and experiencing sharper falls in income compared to the whole population
To properly address these disadvantages we first need to acknowledge that they exist and understand their underlying causes. Change happens when you understand and act on the underlying issues.
At Fair4All Finance we are working hard to understand the reasons, biases and market structures that have financially excluded people from minority ethnic communities.
We are currently commissioning an in-depth study, building on the recommendations of the Runnymede Trust, to help us unpick the existing barriers to financial inclusion facing people from minority ethnic communities.
We are particularly interested in the reasons why Black, Asian and minority ethnic communities have poorer access to financial products and services and how to effectively target and improve services for these communities.
We’re committed to using the insights from this research to work with the whole financial services sector to build fairer and more equitable systems.