DISCRIMINATION IN THE SMALL-BUSINESS CREDIT MARKET

Business Finances to examine the existence of racial discrimination in the small-business credit market. We conduct an econometric analysis of loan outcomes by race and nd that black-owned small businesses are about twice as likely to be denied credit even after controlling for differences in creditworthiness and other factors. A series of speci cation checks indi-cates that this gap is unlikely to be explained by omitted variable bias. These results indicate that the racial disparity in credit availability is likely caused by discrimination. I