The streaming service has announced that it will deposit 2% of its money or estimated $ 100 million, to financial institutions owned by Montenegro and community development organizations, which have better records in lending to minority borrowers than major consumer banks.
Minority banks and credit unions account for only 1% of U.S. total commercial banking assets.
“We believe that bringing more capital to these communities can mean significant things to the people and businesses in them, helping most families buy their first home or save for college, and more small businesses start or grow,” Netflix said in a statement.
As part of the initiative, the company is also investing $ 25 million at its New York headquarters Corporation for Support of Local Initiatives, a development finance company with 35 offices across the country that supports black entrepreneurs in a variety of businesses.
President and CEO of LISC Maurice Jones he said most black-owned companies are self-owned with up to 10 employeesannual income less thanMillions of dollars and usually large commercial banks have no priority hunt(CCF). American bank(BAC), or Wells Fargo(CBEAX).
He said Netflix first contacted his organization about a potential deal after the May 25 murder of George Floyd by Minneapolis police, which sparked a national showdown over systemic racism.
“I remember they approached us after we saw the work we were doing around investing in small businesses, especially businesses run by people of color,” Jones told CNN Business.
About 10% of Netflix’s $ 100 million investment will go to Credit Union of Hope, which funds undervalued communities in the deep south.
Jones said Netflix is one of several major companies to have invested in LISC in the past three weeks. He said he had “never seen anything like it” in the outpouring of support that black-owned financial institutions have received since Floyd’s assassination, but noted that support should be maintained over the years if companies are sincere in their desire to close the nation’s racial wealth gap.
“Do we have the endurance, the fidelity, to do it for years, as we have done in Europe with the EU 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 overall economic health of the country. “