MINNEAPOLIS, March 18, 2003—Despite cultural and economic disadvantages, Hmong entrepreneurs in the Twin Cities appear to have well-developed access to financing sources, including access to the banking sector, according to a recent survey by the Federal Reserve Bank of Minneapolis.
The purpose of the study, performed in conjunction with the Wilder Research Center in St. Paul, was to understand how the Hmong communities in Minneapolis and St. Paul have obtained credit and other financing for business uses. Minnesota is home to the largest urban population of Hmong in the United States with 45,000 Hmong residents, of which 26,000 live in St. Paul.
The survey includes 121 responses from Hmong business owners, surveyed from November 2000 through April 2001. In addition, 93 Twin Cities white-owned businesses participated as part of a control group. Both groups reported similar reasons for not seeking start-up loans and few bank-related financial barriers.
The motivation behind the study is due, in part, to the Community Reinvestment Act of 1977, whereby Congress mandated that the Federal Reserve assess how banks help meet the credit needs of local communities. Other driving forces behind the study include the fact that the Hmong population is a recent immigrant/refugee group that has not been the subject of a credit availability study, and members of the Hmong community may likely face cultural and economic disadvantages.
The Federal Reserve Bank of Minneapolis also conducted interviews with two focus groupsone consisting of representatives of several banks in the St. Paul survey area and a second consisting of Hmong community leadersto qualify the results. These focus groups helped explain the positive results of the survey, said Arthur J. Rolnick, director of Research at the Federal Reserve Bank of Minneapolis. "Independently, both focus groups described similar themes that were necessary to ensure proper access to credit: cultural understanding, willingness of leaders to educate, and flexibility in lending programs."
The study builds on research begun at the Federal Reserve Bank of Chicago, where valuable insight was gained into the African-American and Hispanic communities.
A report of the survey's findings is available upon request. To obtain a copy, contact the Minneapolis Fed's media representative at 612-204-5261.
Wilder Research Center, part of the Amherst H. Wilder Foundation in Saint Paul, is a nonprofit research and evaluation group that works frequently with Hmong and other Southeast Asian organizations and programs.
As one of the 12 Federal Reserve Banks, the Federal Reserve Bank of Minneapolis contributes to a variety of Federal Reserve System functions, including operation of a nationwide payments system, distribution of the nation’s currency and coin, supervision and regulation of member banks and bank holding companies, and serving as a fiscal agent for the U.S. Treasury. Additionally, the president of the Minneapolis Fed serves as a member of the Federal Open Market Committee, the monetary policymaking arm of the Federal Reserve’s Board of Governors.