Credit use and ethnic minorities

Authors: Alicia Herbert, Elaine Kempson
Published by: Policy Studies Institute
Publication date: 1996
ISBN: 0853746958

Based on statistical research and in-depth interviews with 51 low-income households in Brixton and Oldham in the mid-1990s, this study found that Afro-Caribbean, Pakistani and Bangladeshi communities relied on a mixture of loans from friends and relatives, credit from friendly shopkeepers and cash advances from local credit associations, as well as the traditional methods of mail order and hire purchase used by low-wage earners, to finance major purchases and help them through emergencies.

Few individuals had a positive experience of the major lending institutions. Language was a major barrier, with few ethnic minority staff working in banks; some families were forced to employ go-betweens to help them get essential business loans or mortgages.

The report examined differential use of credit among ethnic minority groups, and explored the alternative community-based credit associations developed specifically by Afro-Caribbeans in Brixton and Pakistanis in Oldham.