Banks to be investigated over lending practices

25 November 2011

The start-up business lending practices of British banks are to be investigated by the government, it has emerged.

Nick Clegg, deputy prime minister, has announced the Conservative-Liberal Democrat alliance is planning to conduct a review of financiers amid concerns they may be acting with racial bias.

Claims have been made that high street lenders use tougher criteria when handling applications for loans from black and ethnic minority entrepreneurs in comparison to their white counterparts.

And Mr Clegg believes there is enough doubt surrounding this issue to warrant a full investigation, as research has shown that while 35 per cent of black people want to start their own firm, just six per cent have been successful in achieving this.

"If we are serious about turning the UK into an island of entrepreneurs, we need to get to the bottom of this. What are the barriers to finance?," the minister - who is also MP for Sheffield Hallam - said.

By Gary Cooper

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