Banking barriers: How the Canadian financial sector excludes Black entrepreneurs,

“I was explaining the type of business that I do, that it’s a niche market, that I work with natural hair only. He asked if this is a ‘nappy hair’ business specifically,” she said when recalling her phone conversation with the bank representative.

“‘Is this like a business for nappy girls? Like nappy hair girls?’ I was stunned.” 

The term was used historically to describe the tightly coiled texture of Black hair and was often associated with derogatory caricatures and portrayals of Black natural hair.

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Lorimer said she tried to explain why the term was offensive, but the bank employee did not apologize and then ended the conversation. 

After she filed a complaint, the bank reviewed a recording of the phone call and issued a letter of apology, which CBC News has seen, and wrote the incident did not represent the financial institution’s philosophy. But the damage was already done.

I think there’s a banking industry that may have been built around a more homogeneous, likely white society.– Nichola Lorimer, Edmonton-based entrepreneur

Lorimer said she felt the bank fundamentally didn’t understand her business case nor did it care to.

The entrepreneur said the bank did not focus on the shop’s real estate.

“I think that it’s reflective of a lack of policy,” she told CBC Radio’s Cost of Living. “I think there’s a banking industry that may have been built around a more homogeneous, likely white society.”

Lorimer ended up postponing her plan for a mortgage. 

Black-owned businesses face ‘rudeness and bias’

Poor customer service and cultural insensitivity are common barriers facing Black entrepreneurs who turn to commercial banks for financing, said Caroline Shenaz Hossein, associate professor of business and society at York University in Toronto. 

“It is just so perplexing the level of rudeness and bias that is occurring against people for simply wanting to get their projects funded,” said Hossein, whose research includes financial exclusion.

“It’s kind of an interrogation of questions that really does make them feel badly or feel that the kinds of business they are doing are not worthy of financing.” 

Barriers to financing

While some financing barriers are cultural, others are physical.

A 2010 geographic analysis of banks in Winnipeg, Toronto and Vancouver revealed that although commercial banks are abundant in affluent neighbourhoods, they’re much scarcer and sometimes absent in low-income neighbourhoods with high concentrations of racially diverse residents.

In 2015, when asked how the City of Toronto can support Black-owned businesses, around half of Black respondents identified “accessing financing” as the top issue.

The problem was also flagged in an earlier study published in 2001, which found Blacks in Toronto were more likely to start their own businesses due to racism in the workplace.

New federal loan program

The federal government has acknowledged these systemic barriers. In early…