By CultureBanx Team
- Netflix plans to increase its $100M commitment to Black-led banks
- There are only 21 Black-owned banks in the U.S.
Streaming giant Netflix (NFLX -2.33%) makes good on its pledge to put 2% of its cash, around $100 million in Black-led banks and wants to send even more money in their direction to help close the racial wealth gap. The six financial institutions that received the funds include: Hope Credit Union, the Local Initiatives Support Corporation, The Change Company, Enterprise Community Impact Note, OneUnited Bank, and Calvert Impact Capital’s Community Investment Note. With only 21 Black-owned banks in the U.S., this wave of support should be a demographic game-changer both commercially and personally, as 19% of Black families have either negative wealth or no assets at all.
Why This Matters: In June 2020, Netflix pledged to direct cash to banks supporting Black communities in an effort to help end the multigenerational “capital isolation” impacting many Black families. The streaming giant’s initial investment was intended to help cover bridge loans, participation loans and bank deposits available to African-American borrowers across the country. The company wants to continue this aim towards helping Black communities, especially those impacted by the coronavirus pandemic obtain small-business loans.
“More capital moving into these institutions means more home and small-business loans, resulting in more opportunities for Black communities. So we will be ‘topping up’ our commitment at the end of the year and moving more cash, over and above the $100 million already committed, into these institutions,” the company wrote in a post.
African Americans hold only 2.6% of the nation’s wealth, although making up 13% of the population. The U.S. is home to approximately 2.5 million Black-owned businesses and if companies invested at least 1% of their profits in underserved communities, amounting to more than $20 billion in cash, the racial wealth gap could close within a decade.
Since Netflix announced its injection of cash last June, shares in Carver Bancorp (CARV -4.53%) increased by 515% in New York trading and Broadway Financial’s stock (BYFC -11.25%) gained 87%. This is a much needed boost for the Black economy as these banks typically do not have the amount of deposits that other banks do, thus limiting the amount of lending activity and community investment they can do. Additionally, most Black-owned businesses are usually sole proprietorships earning less than $1 million annual revenue, which means they are not prioritized by large commercial banks such as JPMorgan Chase (JPM -2.17%) or Wells Fargo (WFC -2.08%).
The streamer has partnered with several Black creators including the Obamas, Kenya Barris, and Shonda Rhimes. A report from Horowitz Research found Black audiences are also content trendsetters, with 58% reporting they want to be the first to know about new content and are more likely to watch shows that reflect their experiences. Also, 74% of Black TV viewers reported they stream some of their TV content. Facts like these explain why Netflix has made Black content and talent a focal point of its original programming initiatives in hopes of wading deeper into diverse audiences.
What’s Next: Netflix’s pandemic growth catapulted it to more than 200 million subscribers. With that growth, the company will be “topping up” its commitment at the end of the year and moving more cash beyond the initial $100 million into Black-owned financial institutions. The type of continued support will offer more families a path to an equitable future.
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