NCRC Small Business Lending Report

[Community Development Banking List]

Original message from: jsilver@ncrc.org




Dear Colleagues:

Small businesses are the driving force behind job creation, yet many struggle to find the capital they need to survive and grow. Women and minority-owned businesses face additional impediments. Today, we're pleased to announce a new NCRC study, "Does CRA Small Business Lending Increase Employment: an Examination on a County Level."



The study looks at over 500 counties around the country, exploring the national impact of the Community Reinvestment Act (CRA) on small business lending (CRA motviates banks to make loans to small businesses by examining the extent to which banks are making loans to small businesses). The study can be downloaded at: http://bit.ly/9iYAqC.

Study Findings


The study shows a positive correlation between small business lending and employment. The study also reveals troubling racial inequalities in small business lending. In fact, our analysis finds that counties with greater percentages of minorities had lower rates of small business lending and employment.

The NCRC study looked at 2006 lending data for dozens of counties around the country. Some of the specific findings in NCRC's study include:

* There is a positive correlation between small business lending and employment; the more small business lending in a county, the higher the employment rate.
* Almost 55 percent of the small businesses studied received loans in counties with less than 20 percent African Americans. This ratio declined to 48 percent in counties with 30 percent or more African Americans, on average.
* Employment rates are lower in counties with higher percentages of minorities and African Americans. The average employment rate is 2 percentage points higher for counties with less than 20 percent African Americans than in counties with more than 30 percent African Americans.


If you have any questions about the study, please feel free to contact me, Josh Silver, NCRC Vice President of Research, on 202-628-8866.

Sincerely,



Josh Silver




NCRC


Josh Silver
Vice President of Research & Policy

National Community Reinvestment Coalition (NCRC)
727 15th Street, NW, Suite 900 | Washington, DC 2000
TEL202) 464-2708 | FAX: | www.ncrc.org

Combined Federal Campaign #12361


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