Bank of America and Wells Fargo have met social investment targets set last year to support minority-led businesses and banks.
Bank of America initially set $200 million as a target for equity investment in minority focused funds, and after achieving this goal has revised its aim to $350 million.
CEO of Bank of America, Brian Moynihan said: “Equity investments in minority focused funds, minority depositary institutions (MDIs) and [community development financial institutions] help address a persistent gap in access to growth capital.
“By providing this capital, we’re helping to level the playing field and open more doors for minority led businesses, entrepreneurs and innovation.”
The bank also announced a grant to the Sweet Auburn Works retail accelerator fund, which provides grants of up to $25,000 per business to local entrepreneurs of color.
The investment and grants are part of Bank of America’s $1.25 billion, five-year commitment to advance racial equality and economic opportunity, and is one of the largest programs to tackle racial inequality from a US corporate bank.
Meanwhile, Wells Fargo has finalized investments in two African American MDIs – The Harbor Bank of Maryland and Industrial Bank of Washington DC.
“Being one of only 20 African American banks in the country, this partnership will enhance our ability to grow and create more opportunities to provide capital to those communities we support,” said president and CEO of Industrial Bank, B Doyle Mitchell, Jr.
Wells Fargo has invested in 13 MDIs, helping fulfil the bank’s 2020 commitment to allocate $50 million to Black-owned banks across the US.
As part of the investment, Wells Fargo will also offer a dedicated relationship team that can work with each MDI on financial, technological and product development strategies.
Head of external engagement for diverse segments, representation and inclusion at Wells Fargo, Gigi Dixon, said: “The way we’ve structured this program goes beyond a simple capital investment; we’ve worked to understand these MDIs, their needs, their strategic aspirations, and their challenges. We want to help them grow so they can continue to be important drivers of economic vitality for years to come.”
Last year, banks across the US stepped up their actions both internally and externally to address inequality in the wake of worldwide protests following the death of George Floyd.