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Kabbage Plans to Expand on Research Focusing on Lender Type and Borrower Race

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Our member Kabbage plans to expand on the work done by researchers from NYU Stern on the kind of lenders that had the highest minority share among their Payment Protection Program (PPP) loans. They will work on exploring the reasons behind the found correlation between the lender type and borrower race.  
 
The current research note focused on exploring how PPP lenders differed in the share of their loans that went to minority-owned and especially to Black-owned businesses. Answering the question was challenging, since owner race is not systematically reported in PPP applications to the SBA.  
 
Overall, the exploratory study found that relative to other lenders, MDIs, nonprofits, and fintech lenders make a substantially larger share of their loans to minority borrowers, particularly Black- and Hispanic owned businesses. They also found that nonprofits make a high share of their loans to minorities, but they make a very small number of total PPP loans (13,000). On the other hand, Fintech lenders appear to play an important role in extending PPP loans to Black- and Hispanic-owned businesses. 
 
 
 
Kabbage, Inc. has pioneered a financial services data and technology platform to provide access to automated funding to small businesses in minutes. The firm leverages data generated through business activity such as accounting data, online sales, shipping, and dozens of other sources to understand performance and deliver fast, flexible funding in real time. Kabbage powers small business solutions for big and small, traditional and non-traditional partners for credit, payments, and small business data insights products. Kabbage is backed by leading investors and is proudly headquartered in Atlanta, Georgia. 
 

Financial Inclusion

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