Self-Financing:

In order for Caribbean and some African persons to travel to the UK or whilst on the UK to purchase homes or businesses, there was restricted access to commercial financial services. This lead to black people resorting to saving money within our own community.

Currently due to the financial difficulties in the UK as a community we are victims of a lack of access to financial capital. The creation of a bank would be one way to solve this problem, another way would be to create a formalised system of the Pardnor system.

The creation of a Black Bank can support the development of the community in relation to the development of businesses and purchasing and the acquisition of buildings. The creation of a black bank may be difficult as in the USA this is more simplistic as most African descendent people in the USA are born in America, where as the UK has black people from the West Indies and Africa. There are different countries banks, but there would need the requirement to be an African Caribbean Bank, to encompass all nationalities in the UK.

The considerations of a black bank:

  1. African Caribbean in name and culture
  2. Who chairs the board
  3. Is it private owned
  4. How will the bank be regulated

The development of a bank is a positive step for the black community, the downside is if the bank is willing to run as a commercial business then there will be some persons who are excluded from the services for a variety of reasons. To overcome this credit unions can be used for those with limited access to financial resources, to get access to some financial resources.

There will be some downsides to the creation of a credit union:

  1. Limited borrowing
  2. Capped amount borrowed
  3. Lack of interest created in savings
  4. Not able to be used to create a business
  5. Not able to be used to purchase property
  6. Would need a sponsor to guarantee the loan will be paid back

Credit unions can be standardised through a retail form and financial services, utilising the financial knowledge which exists in the black community. This will allow for the development of more black businesses, more wealth investment, property ownership and a stronger infrastructure.

As listed above the borrowing would be limited and the person borrowing would have to pay the money back at a weekly frequency until the money is paid back like the pardoner system or pay into the union until the money they have is saved. This could limit a person's capacity to purchase a business or a property, but it may have use for going travailing or saving for personal use.

In the creation of a new economy for black people a form of both self-regulation and formal regulation is required through the setup of a local or regional committee of financially qualified persons who do not have an interest in the financial institutions. These are required to ensure, accountability and transparency.  In order to ensure these process are put in place financial education is key to implementing financial services and products to the economic development of the black community.

The possible structure of the regulated committee would consist of:

  1. A board of accounting, financial services, tax and commerce professionals, who have experience of working in or with financial services.

  1. They would meet on a monthly basis and audit the banks and financial institutions against fraud and dishonesty.

  1. The main remit would be to ensure all financial services provided in the black economy would be transparent and accountable to the black community and the banks/credit unions customers.

  1. There would be the requirement of a national black financial regulation committee, who would then work with a regional body who would then regulate black financial service providers and banks within their local area.

  1. The committee would work with the national (UK) banking framework on financial regulation but apply it in an African way.

Financial inclusion is important as well as financial education, as people need bank accounts and a place to access money and services, without the need to use payday lenders or loan sharks. The credit unions and formalised pardnor systems can allow money to be saved and for ventures or whatever the saver wishes to use the money for, whilst financial education will allow the individual to invest in stocks and shares or create more capital using the financial capital they have already.

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