RBC, TD launch programs for Black customers

By Melissa Shin | October 18, 2021 | Last updated on October 27, 2023
3 min read

Two programs aimed at improving banking for Black customers launched last week.

Royal Bank of Canada now offers the RBC Black Entrepreneur Business Loan (BEBL), which will provide eligible Black entrepreneurs in Canada with loans of up to $250,000 over the next five years. The BEBL will be administered by “dedicated program experts” who are “committed to [ensuring] fair and equitable access to capital,” said Alecia Aquino, director of commercial financial services strategy.

The BEBL program, which Aquino said was developed based on feedback from the Black community, will also provide access to expertise and mentorship for successful applicants. The BEBL program is separate from the Black Entrepreneurship Loan Fund (BELF) announced in May by the federal government, which RBC is also “promoting,” she said.

Part of RBC’s commitment to diversity and inclusion means “understanding that Black entrepreneurs have faced systemic and disproportionate barriers to enabling their success,” Aquino said.

Calls have grown in recent months for banks to consider how systemic racism affects their customer service and lending practices. A survey of 342 Black entrepreneurs released in May found that anti-Black systemic racism, particularly at banks, creates widespread barriers. The survey, commissioned by the African Canadian Senate Group and Senator Colin Deacon, revealed that only 19% of Black entrepreneurs said they trust banks to do what is right for them and their community.

Terms under the BEBL will vary by applicant, but Aquino said the terms “are geared toward making sure entrepreneurs not only have the ability to support and grow their business” but also “recognizes some of the challenges [Black entrepreneurs] have had in the past with getting access to capital.”

Also last week, Toronto-Dominion Bank announced a new strategy aimed at improving the experiences of Black customers.

TD was among the banks facing calls to root out bias from customer service after the CBC highlighted a series of incidents at an Ottawa branch in April.

“I’ve always anchored on the fact that it’s not on the [Black] community to change; it’s on us as an organization to change to address this problem,” said Al Ramsay, associate vice-president for the LGBTQ2+ and Black customer segments at TD. “That was the impetus for us to design and launch our Black customer experience strategy.”

The initiative has eight full-time employees across Canada who will train TD frontline and back-office staff, like credit adjudicators, on how to better serve Black customers. (This training will go beyond the anti-racism training TD already rolled out to all staff.)

“I want our team to act as a liaison between TD and the Black community,” Ramsay said. “Our latest research is telling us there is a breakdown of trust between the Black community and institutions, including banks. The community feels a muted sense of possibility.”

Ramsay, who was hired in 2005 to build relationships between TD and the Black and LGBTQ2+ communities, said the research also showed the community is asking for more financial education, which the initiative will also work on. Furthermore, “we’re going to look at our processes and policies [and ask], ‘How does systemic racism permeate through that?'”

TD will gauge the initiative’s success by tracking and acting on customer sentiment ratings and feedback from the Black community, Ramsay said.

In September, TD announced it would donate $10 million over the next five years to the Black Opportunity Fund, which will offer Black businesses and organizations long-term, stable capital. TD also intends to double its representation of Black executives by the end of 2022 and increase minority executive representation across the bank by 50% by 2025.

TD has not begun offering loans under the BELF program, Ramsay said.

RBC’s announcement follows two commitments made earlier this year to programs supporting Black entrepreneurs.

In March, RBC pledged up to $40 million over five years to the Black Entrepreneur Startup Program, which is delivered by Futurpreneur Canada. In June, RBC invested $1 million in Black Innovation Capital, which supports pre-seed and seed-stage Canadian technology businesses.

The BEBL program will comprise a “significant” portion of the remaining $59 million in RBC’s July 2020 pledge to lend $100 million over five years to Black small business owners, Aquino said. “We continue to look for opportunities to continue to create access to capital.”

Applicants to the RBC BEBL must self-identify as Black or Black and another ethnicity. A partnership must be at least 50% Black-owned and a corporation must be at least 25% Black-owned to be eligible for the loan.

In July 2020, RBC said it would make anti-racism and unconscious bias training mandatory for all employees.

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Melissa Shin

Melissa is the editorial director of Advisor.ca and leads Newcom Media Inc.’s group of financial publications. She has been with the team since 2011 and been recognized by PMAC and CFA Society Toronto for her reporting. Reach her at mshin@newcom.ca. You may also call or text 416-847-8038 to provide a confidential tip.