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
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
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.