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Six Black Banks Join Citi’s New Digital Platform To Increase Lending To African American Entrepreneurs

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Six Black banks — including four of the nation’s largest — have joined a new digital platform by Citi. The action could help the banks increase lending to African American entrepreneurs.

According to a news release, the banks are part of a consortium linking with Bridge built by Citi, a bank-led, digital meeting place that connects businesses seeking loans up to $10 million. The “first-of-its-kind platform is aimed to expand access to capital and financial services to Black small business owners.

The platform launched by Citi matches local and regional banks with local small businesses needing funding for improvements and expansion amid the post-COVID-19 pandemic.

The initiative will initially consist of 18 banks that Citi will send business leads to. The platform will be usable to businesses through a pilot program across the Southeast and Rockies regions, including Alabama, Colorado, Georgia, Louisiana, North Carolina, South Carolina, and Tennessee.

The alliance comes as Black businesses have been disproportionately hit harder by COVID-19 than other businesses. For instance, some 53% of Black business owners have seen revenues drop by 50% or more since the crisis became a broad concern, versus just 37% of white business owners. It was also revealed that 47% of entrepreneurs are not optimistic about their success in 2021.

Black banks on the platform are Mechanics & Farmers Bank in Charlotte, North Carolina; Unity National Bank in Houston, Texas; Citizens Trust Bank in Atlanta; and Liberty Bank & Trust Co. in Tuskegee, Alabama. Those banks are among those on the BE 100s Banks list. Other Black-owned banks included are Opus Bank in Columbia, South Carolina, and Carver State Bank in Savannah, Georgia.

Richard Banziger, head of Citi’s U.S. Commercial Bank, stated: “Citi believes in the power of local, small businesses and continues to find ways to support businesses that are the foundation of communities across the U.S. Citi funded loans totaling more than $5 billion as part of the Small Business Administration’s Paycheck Protection Program during 2020 and 2021.”

He added, “As both a lender and a community stakeholder, we have a deep understanding of the problems businesses face when trying to navigate the borrowing process. We are committed to finding digital solutions that can make the process easier, more seamless and more equitable.”

Citi is the brand name for the global bank Citigroup.

For many small- to medium-sized businesses in the U.S., securing a loan involves manual processes that can be time-consuming, according to the news release. They are often limited to banks near their own location. Further, local and community banks have limited access to digital tools to reach potential borrowers, making it difficult to enlarge their customer base.

The platform aims to help change that. For instance, potential borrowers will interact with numerous lenders through a single, quick, and easy online request.

For the Black banks, the platform could also be fruitful in other ways. The banks could potentially form new relationships and offer other products and services to proprietors beyond just loans.

Alden J. McDonald, Jr., president and CEO of Liberty Bank and Trust, stated via email:

“Through our rich history of helping underserved borrowers, Liberty Bank has developed a unique understanding of our markets. However, the digital revolution, that includes credit cards, internet banking, and contactless payment technology, is now evolving, yet again, to include accessing capital via digital platforms. Bridge built by Citi will play a critical role in creating an additional channel for prospective borrowers to access capital in a world of constant innovation. This will undoubtedly empower prospective borrowers and spur a competitive banking landscaping for their business. Liberty Bank will enjoy offering our services to a pool of prospective borrowers who would otherwise be out of reach.”

Unity National Bank Board Chairman Dr. Kase L. Lawal added:

“Partnering with Citi, and participating in the Bridge built by Citi is a natural extension of our community banking mission to facilitate inclusive access to capital to local and small businesses and sole proprietors. The digitization of the loan process will assist us to further democratize access to capital to our communities who historically have been underserved and are disparately impacted by the COVID-19 pandemic.”

Check out more details on the platform here.