Do more to help finance ethnic entrepreneurs, Clegg urges

The report found no evidence of racial discrimination but the banks have agreed to commission further research and monitor the situation.

The inquiry was ordered by Liberal Democrat leader Mr Clegg in 2011, after he described economic opportunity as “the next frontier for race equality’’ and said the banks must not be “let off the hook’’ over their responsibilities.

Mr Clegg’s comments were echoed by deputy Lib Dem leader Simon Hughes at the party’s conference last year, where he accused some banks of making “racist decisions”.

But, responding to the publication of the report, Mr Clegg said: “I welcome the fact that the report finds no evidence of racial discrimination, and I am pleased to see the banking industry has agreed to a range of measures to address the various factors that have prevented some entrepreneurs from getting loans.

“I am particularly glad to see the banks commit to independent research on ethnic minority businesses and their experience of accessing finance so that they can monitor the situation.

“This report is a good start, and a valuable statement of intent, but there is much more to be done.”

The report found ethnic minority businesses “disproportionately face challenges which make access to finance more difficult”, including a lack of collateral, language barriers and poor credit ratings.

The British Bankers’ Association (BBA) has agreed to fund independent research into the experience of ethnic businesses trying to access finance.