Heard on the Street: fiscal justice investing, small business aid drying up, and Black-owned banks dwindling

By September 8, 2020 Heard on the Street

Heard on the Street – here’s what we were reading last week:

Investors Want to Align Their Dollars with Racial Justice Demands: It’s no longer enough simply to avoid investments that exacerbate racial injustice. “Fiscal Justice” investors want to be proactive about investing in ways that directly support racial justice, especially in this moment when COVID-19 has hit Black-owned businesses the hardest and a wave of uprisings continues in response to recent police killings.

Small-Business Failures Loom as Federal Aid Dries Up: The United States faces a wave of small-business failures this fall if the federal government does not provide a new round of financial assistance — a prospect that economists warn would prolong the recession, slow the recovery and perhaps enduringly reshape the American business landscape.

How investors can blend finance for CDFIs to advance economic and racial justice: Blended finance uses relatively small amounts of donor funds to mitigate investment risks and rebalance risk-reward profiles of pioneering, high-impact investments so that they have the potential to become commercially viable over time. Blended finance bridges the divide between doing good and doing well.

Minority entrepreneurs at a tipping point as Black-owned banks dwindle in the U.S.: Black Americans have been hit disproportionately hard by the Covid-19 pandemic, and the White-led financial institutions that could theoretically offer economic support may simply not be enough. The coronavirus pandemic has exacerbated a crisis for Americans already facing poor economic and health outcomes, and highlights the lack of financial services institutions run by Black founders and executives.