The streaming service announced plans to deposit 2% of its cash, or an estimated $ 100 million, with black-owned financial institutions and community development organizations, which have a better track record of lending to minority borrowers than consumer banks. conventional.
Minority-owned banks and credit unions account for only 1% of total U.S. commercial bank assets.
“We believe that bringing more capital to these communities can make a significant difference for the people and businesses that comprise them, helping more families buy their first home or save for college, and for smaller businesses to start or grow,” he said. Netflix in a statement.
As part of the initiative, the company is also investing $ 25 million in the New York-based Local Initiatives Support Corporation, a development finance company with 35 offices across the country that supports black entrepreneurs in a variety of businesses.
LISC President and CEO Maurice Jones said that most black-owned companies are sole proprietorships with up to 10 employees with annual income of less than $ 1 million, and are generally not prioritized by large commercial banks like Persecution (CCF), Bank of America (BAC)or Wells Fargo (CBEAX).
He said Netflix first approached his organization about a possible deal after the May 25 killing of George Floyd by the Minneapolis police, which triggered a national trial on systemic racism.
“I remember being contacted after seeing the work we were doing to invest in small businesses, particularly businesses run by people of color,” Jones told CNN Business.
About 10% of Netflix’s $ 100 million investment will go to Hope Credit Union, which funds underserved communities in the Deep South.
Jones said Netflix is one of several major companies that have invested in LISC for the past three weeks. He said he “has never seen anything like this” like the flow of support that black-owned financial institutions have received since Floyd’s murder, but noted that the support must be sustained over a period of years if the companies are sincere in wanting to shut down. the racial wealth of the nation. gap.
“Do we have the resistance, the fidelity, to do this for years, as we did in Europe with the Marshall Plan after World War II?” Jones asked. “If we build black wealth and minority communities in this country, it will be good for them and for the entire economic health of the country.”
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