IDEAS home Printed from https://ideas.repec.org/a/sae/ecdequ/v14y2000i3p227-242.html
   My bibliography  Save this article

Financing the Development of Urban Minority Communities: Lessons of History

Author

Listed:
  • Timothy Bates

    (Wayne State University)

Abstract

Government intervention in financial markets seeks to alter capital availability patterns that disadvantage minorities and low-income people. The desire to increase access to credit for these underserved groups motivated President Clinton to launch the Community Development Financial Institution (CDFI) program. In fact, CDFI-like institutions proliferated in the late 1960s, and many of them still exist. The Minority Enterprise Small Business Investment Company (MESBIC) program, started in 1969, created several hundred privately owned firms that finance inner city-situated and/or minority-owned small businesses. This study uses U.S. Small Business Administration records to analyze the impacts of actual MESBIC investments in small businesses. Strategies used by MESBICs that actively financed minority business enterprises are identified, and the traits of effective MESBICs are contrasted to traits of those that have shut down. Nearly 100 MESBICs remain active today, and the track record of the program over the past 30 years offers a wealth of insights to present-day proponents of CDFIs.

Suggested Citation

  • Timothy Bates, 2000. "Financing the Development of Urban Minority Communities: Lessons of History," Economic Development Quarterly, , vol. 14(3), pages 227-242, August.
    • Handle: RePEc:sae:ecdequ:v:14:y:2000:i:3:p:227-242
    DOI: 10.1177/089124240001400301
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/089124240001400301
    Download Restriction: no
    File URL: https://libkey.io/10.1177/089124240001400301?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Timothy Bates, 1997. "Response: Michael Porter's Conservative Urban Agenda will not Revitalize America's Inner Cities: What will?," Economic Development Quarterly, , vol. 11(1), pages 39-44, February.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Christian Weller, 2009. "Credit Access, the Costs of Credit and Credit Market Discrimination," The Review of Black Political Economy, Springer;National Economic Association, vol. 36(1), pages 7-28, March.
    2. Christian E. Weller & Amy Helburn, 2009. "Public Policy Options to Build Wealth for America’s Middle Class," Working Papers wp210, Political Economy Research Institute, University of Massachusetts at Amherst.
    3. P. Köllinger & M. Minniti, 2006. "Not for Lack of Trying: American Entrepreneurship in Black and White," Small Business Economics, Springer, vol. 27(1), pages 59-79, August.
    4. Peake, Whitney O. & Marshall, Maria I., 2009. "Has the "Farm Problem" Disappeared? A Comparison of Household and Self-Employment Income Levels of the Farm and Nonfarm Self-Employed," 2009 Annual Meeting, January 31-February 3, 2009, Atlanta, Georgia 46304, Southern Agricultural Economics Association.
    5. Timothy Bates, 2000. "Rejoinder to Sheryll Cashin: Programs as Token Gestures," Economic Development Quarterly, , vol. 14(3), pages 250-255, August.
    6. Lois M. Shelton, 2010. "Fighting an Uphill Battle: Expansion Barriers, Intra–Industry Social Stratification, and Minority Firm Growth," Entrepreneurship Theory and Practice, , vol. 34(2), pages 379-398, March.
    7. Valentina Hartarska & Denis Nadolnyak, 2012. "Board size and diversity as governance mechanisms in community development loan funds in the USA," Applied Economics, Taylor & Francis Journals, vol. 44(33), pages 4313-4329, November.
    8. Timothy Bates, 2002. "Rejoinder to Charles D. Tansey: Moving Toward a More Effective Small Business Administration," Economic Development Quarterly, , vol. 16(2), pages 185-190, May.
    9. Christian Weller, 2010. "Have Differences in Credit Access Diminished in an Era of Financial Market Deregulation?," Review of Social Economy, Taylor & Francis Journals, vol. 68(1), pages 1-34.
    10. Sheryll D. Cashin, 2000. "Public Subsidies and the Role of Suburbanization in Urban Economic Development: A Reply to Timothy Bates," Economic Development Quarterly, , vol. 14(3), pages 243-248, August.
    11. Richard C. Hula & Marty P. Jordan, 2018. "Private Investment and Public Redevelopment: The Case of New Markets Tax Credits," Poverty & Public Policy, John Wiley & Sons, vol. 10(1), pages 11-38, March.
    12. Timothy Bates & Alicia Robb, 2013. "Greater Access to Capital Is Needed to Unleash the Local Economic Development Potential of Minority-Owned Businesses," Economic Development Quarterly, , vol. 27(3), pages 250-259, August.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Robert Singh & Micah Crump, 2007. "Educational Attainment: A Key Factor for Improving the Lagging Rate of Black Entrepreneurship," The Review of Black Political Economy, Springer;National Economic Association, vol. 34(3), pages 217-229, December.
    2. Daniel A. Hartley & Nikhil Kaza & T. William Lester, 2016. "Are America’s Inner Cities Competitive? Evidence From the 2000s," Economic Development Quarterly, , vol. 30(2), pages 137-158, May.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:ecdequ:v:14:y:2000:i:3:p:227-242. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.