Banks Face Scrutiny Over Lack of Transparency in Black Entrepreneur Loan Programs
Despite a flurry of initiatives aimed at increasing financial access for Black business owners in Canada, major banks have come under fire for their lack of transparency regarding the impact and success of their loan programs. As these financial institutions roll out support packages for Black entrepreneurs, many remain tight-lipped about how effective these programs have been in removing barriers to capital access.
Following the killing of George Floyd in 2020, a national reckoning led to discussions between Canada’s banks, the federal government, and Black business organizations about addressing systemic challenges faced by Black entrepreneurs. The result was a commitment to increase funding opportunities tailored specifically for Black business owners. However, more than three years on, many of the country’s largest banks have yet to disclose key data about the actual reach of their programs.
In 2021, banks such as the Royal Bank of Canada (RBC) and Canadian Imperial Bank of Commerce (CIBC) promised to launch initiatives aimed at improving access to credit for Black entrepreneurs. Yet, despite several follow-ups by The Globe and Mail, which sought transparency on loan distribution and program outcomes, most banks have declined to provide detailed statistics on the number of loans approved or the total amount disbursed.
Of the major players, CIBC and RBC are the only two to have shared any concrete numbers. CIBC, which launched its Black Entrepreneurship Program in 2022, reported approving over $14 million in loans, surpassing its target of $13 million. These loans, which are intended to support equipment purchases, leasehold improvements, and working capital, are offered to Black business owners with a maximum limit of $250,000.
RBC has committed a total of $44.5 million in support of Black Canadian entrepreneurs as part of a broader $100 million, five-year initiative. The bank’s Black Entrepreneur Program, which includes a startup loan component in partnership with Futurpreneur Canada, has expanded its offerings. As of 2023, eligible young Black entrepreneurs can now access loans of up to $75,000, up from a previous cap of $60,000, with more extensive mentorship and networking opportunities provided.
In contrast, other major banks such as Bank of Nova Scotia (Scotiabank), Toronto-Dominion Bank (TD), Bank of Montreal (BMO), and National Bank have been less forthcoming with details. Scotiabank’s Black-Led Business Financing Program, launched in mid-2022, and TD’s Black Entrepreneur Credit Access program, introduced in early 2023, have both been met with limited or no public data about the funds disbursed. While TD noted that it has approved 63.7% of applicants, the bank did not disclose the total value of loans granted.
Jackee Kasandy, CEO and founder of Black Entrepreneurs and Businesses of Canada, expressed frustration at the slow pace of change. “Three to four years in, despite some progress, the banking and other funding systems still move slowly when it comes to real, equitable funding opportunities for Black business owners,” she said, highlighting the ongoing challenges faced by Black entrepreneurs in accessing capital.
For many business owners, these programs have been a lifeline. Sean Whyte, the owner of Grey Hearts, a shop in Kelowna, B.C., credits a loan he received through TD’s program in 2023 for enabling him to upgrade his business and recover from both the COVID-19 pandemic and a devastating wildfire that damaged his store. “I don’t even know how I would have survived without having that injection earlier in the year,” he said, recalling the challenges he faced when his store was also targeted by thieves.
Similarly, Domum Care, a Montreal-based company supporting elderly and mobility-impaired individuals, has benefitted from BMO’s BMO for Black Entrepreneurs program. Co-founder Roch Dupervil explained that the program helped the company navigate cash flow issues tied to delayed government payments, enabling them to expand operations and hire additional staff.
While these anecdotes suggest that the programs are having some positive effects, the lack of transparency continues to raise questions about the broader impact of these initiatives. Without clear metrics and detailed reports, it remains difficult to assess whether these efforts are truly breaking down the financial barriers that have long hindered Black entrepreneurs in Canada.
National Bank, for its part, has opted to partner with the Black Opportunity Fund (BOF) rather than launch its own lending program. However, the fund has yet to be fully operational, though the bank has contributed $1.25 million in support.
As the conversation about equity and access to capital continues to unfold, the demand for transparency and measurable results from Canada’s banks is only expected to grow.
Banks Face Scrutiny Over Lack of Transparency in Black Entrepreneur Loan Programs
Despite a flurry of initiatives aimed at increasing financial access for Black business owners in Canada, major banks have come under fire for their lack of transparency regarding the impact and success of their loan programs. As these financial institutions roll out support packages for Black entrepreneurs, many remain tight-lipped about how effective these programs have been in removing barriers to capital access.
Following the killing of George Floyd in 2020, a national reckoning led to discussions between Canada’s banks, the federal government, and Black business organizations about addressing systemic challenges faced by Black entrepreneurs. The result was a commitment to increase funding opportunities tailored specifically for Black business owners. However, more than three years on, many of the country’s largest banks have yet to disclose key data about the actual reach of their programs.
In 2021, banks such as the Royal Bank of Canada (RBC) and Canadian Imperial Bank of Commerce (CIBC) promised to launch initiatives aimed at improving access to credit for Black entrepreneurs. Yet, despite several follow-ups by The Globe and Mail, which sought transparency on loan distribution and program outcomes, most banks have declined to provide detailed statistics on the number of loans approved or the total amount disbursed.
Of the major players, CIBC and RBC are the only two to have shared any concrete numbers. CIBC, which launched its Black Entrepreneurship Program in 2022, reported approving over $14 million in loans, surpassing its target of $13 million. These loans, which are intended to support equipment purchases, leasehold improvements, and working capital, are offered to Black business owners with a maximum limit of $250,000.
RBC has committed a total of $44.5 million in support of Black Canadian entrepreneurs as part of a broader $100 million, five-year initiative. The bank’s Black Entrepreneur Program, which includes a startup loan component in partnership with Futurpreneur Canada, has expanded its offerings. As of 2023, eligible young Black entrepreneurs can now access loans of up to $75,000, up from a previous cap of $60,000, with more extensive mentorship and networking opportunities provided.
In contrast, other major banks such as Bank of Nova Scotia (Scotiabank), Toronto-Dominion Bank (TD), Bank of Montreal (BMO), and National Bank have been less forthcoming with details. Scotiabank’s Black-Led Business Financing Program, launched in mid-2022, and TD’s Black Entrepreneur Credit Access program, introduced in early 2023, have both been met with limited or no public data about the funds disbursed. While TD noted that it has approved 63.7% of applicants, the bank did not disclose the total value of loans granted.
Jackee Kasandy, CEO and founder of Black Entrepreneurs and Businesses of Canada, expressed frustration at the slow pace of change. “Three to four years in, despite some progress, the banking and other funding systems still move slowly when it comes to real, equitable funding opportunities for Black business owners,” she said, highlighting the ongoing challenges faced by Black entrepreneurs in accessing capital.
For many business owners, these programs have been a lifeline. Sean Whyte, the owner of Grey Hearts, a shop in Kelowna, B.C., credits a loan he received through TD’s program in 2023 for enabling him to upgrade his business and recover from both the COVID-19 pandemic and a devastating wildfire that damaged his store. “I don’t even know how I would have survived without having that injection earlier in the year,” he said, recalling the challenges he faced when his store was also targeted by thieves.
Similarly, Domum Care, a Montreal-based company supporting elderly and mobility-impaired individuals, has benefitted from BMO’s BMO for Black Entrepreneurs program. Co-founder Roch Dupervil explained that the program helped the company navigate cash flow issues tied to delayed government payments, enabling them to expand operations and hire additional staff.
While these anecdotes suggest that the programs are having some positive effects, the lack of transparency continues to raise questions about the broader impact of these initiatives. Without clear metrics and detailed reports, it remains difficult to assess whether these efforts are truly breaking down the financial barriers that have long hindered Black entrepreneurs in Canada.
National Bank, for its part, has opted to partner with the Black Opportunity Fund (BOF) rather than launch its own lending program. However, the fund has yet to be fully operational, though the bank has contributed $1.25 million in support.
As the conversation about equity and access to capital continues to unfold, the demand for transparency and measurable results from Canada’s banks is only expected to grow.
