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Ethnicity and bank lending before and during COVID-19

Marc Cowling (Business, University of Derby, Derby, UK)
Weixi Liu (School of Management, University of Bath, Bath, UK)
Elaine Conway (Business School, University of Derby, Derby, UK)

International Journal of Entrepreneurial Behavior & Research

ISSN: 1355-2554

Article publication date: 13 July 2021

Issue publication date: 31 March 2023




Using ethnicity as our point of focus, the authors consider the dynamics of the demand for bank loans, and the willingness of banks to supply them, as the UK economy entered the COVID-19 pandemic in early 2020 with a particular focus on potential behavioural differences on the demand-side and discrimination on the supply-side. In doing so we directly address crisis induced financial concerns and how they played out in the context of ethnicity.


Using the most recent ten quarterly waves of the UK SME Finance Monitor survey the authors consider whether ethnicity of the business owner impacts on the decision to apply for bank loans in the first instance. The authors then question whether ethnicity influences the banks decision to meet or reject the request for a bank loan.


The authors’ pre-COVID-19 results show that there were no ethnic differences in loan application and success rates. During COVID-19, both white and ethnic business loan application rates rose significantly, but the scale of this increase was greater for ethnic businesses. The presence of government 100% guaranteed lending also increased general loan success rates, but again the scale of this improvement was greater for ethnic businesses.

Research limitations/implications

The authors show very clearly that differences in the willingness of banks to supply loans to SMEs relate very explicitly to firm specific characteristics and ethnicity either plays no additional role or actually leads to improved loan outcomes. The data is for the UK and for a very unique COVID time which may mean that wider generalisability is unwise.

Practical implications

Ethnic business owners should not worry about lending discrimination or be discouraged from applying for loans.

Social implications

The authors identify at worst no lending discrimination and at best positive ethnic discrimination.


This is one of the largest COVID-19 period studies into the financing of ethnic businesses.



This paper forms part of a special section “The effect of COVID-19 on the performance of ethnic-minority firms in the UK and worldwide”, guest edited by George Saridakis, Bochra Idris and Paul Jones.


Cowling, M., Liu, W. and Conway, E. (2023), "Ethnicity and bank lending before and during COVID-19", International Journal of Entrepreneurial Behavior & Research, Vol. 29 No. 3, pp. 614-642.



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