A Preliminary Study of Barriers to Bank Financing of Ethnic Chinese Entrepreneurs in the UK

Abstract

Ethnic minority entrepreneurship has been a growing research interest, however, little has been known about financial barriers to start up and run a business venture from the perspectives of UK ethnic Chinese entrepreneurs. The aim of this study is to explore the financial barriers of ethnic Chinese entrepreneurs in starting up and running a business in the UK. Through semi-structured interviews with 12 ethnic Chinese entrepreneurs who run businesses in the UK, this study has preliminarily found: 1) ethnic Chinese businesses in the UK have increasingly faced difficulties to get access to bank finance since the global financial crisis; 2) the difficulties are largely caused by a lack of communication and understanding between the entrepreneurs and financial institutions; 3) the traditional perceptions of Chinese businesses have disadvantaged ethnic Chinese entrepreneurs in the UK when they apply for bank credits. This study offers a number of implications. For policy-makers, an understanding of the characteristics of ethnic Chinese businesses and financing barriers to ethnic Chinese in business start-ups and running is important for the development of policy that encourages and supports ethnic Chinese businesses. For banks in the UK to expand their business, there is a need to develop tailored products and services specifically for ethnic Chinese entrepreneurs.

Forcibly displaced refugee women entrepreneurs in Glasgow-Scotland

“…We found that entrepreneurial alertness was not acted on earlier due to those women lacking collateral, having poor credit scores and living in deprived areas. Our findings are supported by Mwaura et al (2019), Carter et al (2015), Jones et al (2015), Savazzi et al (2020), Bikorimana et al (2018), Lyon et al (2007) and Zhang (2015). Our sample reported that because they live in deprived areas, exploiting entrepreneurial opportunities is difficult due to a lack of funding.…”

“…Other studies suggested that disadvantaged groups lack recognition of their role in the UK economy (Jones et al , 2015). These are due to poor credit records, and they cannot get funding from lenders (Fraser, 2014; Savazzi et al , 2020; Bikorimana et al , 2018; Lyon et al , 2007; Zhang, 2015). The lack of long-term resettlement during credit-score assessment prevents them from accessing start-up finance (Nijhoff, 2019).…”

“…Ram et al (2020) reveal that ventures embedded within institutional business support networks may have better access to new ideas and promote business development. Ramadani et al (2020) and Zhang (2015) studies stressed that immigrant entrepreneurs depend on family support, making use of their social networks to gain access to finance, markets and other resources. A study by Mawson and Kasem (2019) found that forcibly displaced refugee women entrepreneurs lack support from their family, friends and relatives, hence, building a social network within wider communities becomes difficult.…”

“…Findings suggest that most of these forcibly displaced refuge women have the necessary skills, experience and knowledge to identify and exploit business opportunities for starting, despite facing several challenges in creating enterprises (Bikorimana and Nziku, 2023; Adeeko and Treanor, 2022; Huq and Venugopal, 2021; Kooy, 2016; Senthanar et al , 2021). However, evidence suggests that many forcibly displaced women face barriers to accessing the labour market due to language barriers (Alrawadieh et al , 2019; Mulvey, 2015); cultural barriers and labour exclusion (Zhang, 2015; Ram et al , 2022; Meer et al , 2020; Refai et al , 2021), lacking recognition of their educational qualifications (Maj and Kubiciel-Lodzińska, 2020; Collins, 2017; Backman et al , 2020; Craig, 2015; Lazarczyk-Bilal and Glinka, 2021; Bikorimana and Nziku, 2023, 2022). Similar studies found that most of the forcibly displaced women faced acute difficulties in finding jobs because of discrimination, racism and xenophobia (Luseno and Kolade, 2022; Griffiths and Yeo, 2021; Stewart and Shisheva, 2015; Carter et al , 2015; Ram, Jones, Doldor, Villares-Varela and Li, 2022).…”

Challenges and issues facing ethnic minority small business owners

“…At the same time studies of ethnic minority entrepreneurs in a variety of countries have found that entrepreneurs are also constrained by a number of barriers (Sepulveda et al, 2008;Bruder et al, 2011;Bates and Robb, 2014;Freeland and Keister, 2014). However, a vast majority of these studies have concentrated on entrepreneurs operating in areas with larger ethnic minority populations (Jones et al, 2014;Zhang, 2015), and less is known about the challenges faced by ethnic minority entrepreneurs operating in cities or towns with a smaller co-ethnic community to draw upon. Studies such as Deakins et al (2005), which have covered Scottish localities with lower concentrations including Aberdeen, have shown that small business ownership remains important for ethnic minority groups, accounting for a relatively high share of employment.…”