A Preliminary Study of Barriers to Bank Financing of Ethnic Chinese Entrepreneurs in the UK


Ethnic minority entrepreneurship has been a growing research interest, however, little has been known about financial barriers to start up and run a business venture from the perspectives of UK ethnic Chinese entrepreneurs. The aim of this study is to explore the financial barriers of ethnic Chinese entrepreneurs in starting up and running a business in the UK. Through semi-structured interviews with 12 ethnic Chinese entrepreneurs who run businesses in the UK, this study has preliminarily found: 1) ethnic Chinese businesses in the UK have increasingly faced difficulties to get access to bank finance since the global financial crisis; 2) the difficulties are largely caused by a lack of communication and understanding between the entrepreneurs and financial institutions; 3) the traditional perceptions of Chinese businesses have disadvantaged ethnic Chinese entrepreneurs in the UK when they apply for bank credits. This study offers a number of implications. For policy-makers, an understanding of the characteristics of ethnic Chinese businesses and financing barriers to ethnic Chinese in business start-ups and running is important for the development of policy that encourages and supports ethnic Chinese businesses. For banks in the UK to expand their business, there is a need to develop tailored products and services specifically for ethnic Chinese entrepreneurs.

Share and Cite:

Zhang, J. (2015) A Preliminary Study of Barriers to Bank Financing of Ethnic Chinese Entrepreneurs in the UK. Open Journal of Social Sciences, 3, 105-110. doi: 10.4236/jss.2015.37018.

Conflicts of Interest

The authors declare no conflicts of interest.


[1] Audretsch, D. (2012) Entrepreneurship Research. Management Decision, 50, 755-764. http://dx.doi.org/10.1108/00251741211227384
[2] Crumpton, A.M. (2012) Innovation and Entrepreneurship. The Bottom Line, 25, 98-101. http://dx.doi.org/10.1108/08880451211276539
[3] Aldrich, H.E. and Waldinger, R. (1990) Ethnicity and Entrepre-neurship. Annual Review of Sociology, 16, 111-135. http://dx.doi.org/10.1146/annurev.so.16.080190.000551
[4] Bianchi, M. (2012) Financial Development, Entrepre-neurship, and Job Satisfaction. The Review of Economics and Statistics, 94, 273-286. http://dx.doi.org/10.1162/REST_a_00156
[5] Assudani, R.H. (2009) Ethnic Entrepreneurship: The Distinct Role of Ties. Journal of Small Business and Entrepreneurship, 22, 197-206. http://dx.doi.org/10.1080/08276331.2009.10593450
[6] Deakins, D., Ram, M. and Smallbone, D. (2003) Addressing the Business Support Needs of Ethnic Minority Firms in the United Kingdom. Environment and Planning C: Government and Policy, 21, 843-859. http://dx.doi.org/10.1068/c0305
[7] Fadahunsi, A., Smallbone, D. and Supri, S. (2000) Networking and Ethnic Minority Enterprise Development: Insights from a North London Study. Journal of Small Business and Enterprise Development, 7, 28-40. http://dx.doi.org/10.1108/eum0000000006842
[8] Ma, Z., Zhao, S., Wang, T. and Lee, Y. (2013) An Overview of Contemporary Ethnic Entrepreneurship Studies: Themes and Relationships. International Journal of Entrepreneurial Behaviour & Research, 19, 32-52. http://dx.doi.org/10.1108/13552551311299242
[9] Chaudhry, S. and Crick, D. (2004) The Business Practices of Small Chinese Restaurants in the UK: An Exploratory Investigation. Strategy Change, 13, 37-49. http://dx.doi.org/10.1002/jsc.655
[10] Curran, J. and Blackburn, R. (1993) Ethnic Enterprise and the High Street Bank, Kingston Business School, Kingston University, London.
[11] U.S. Department of Commerce (1997) The State of Small Business: A Report of the President.
[12] Cooney, T.M. (2005) What Is an Entrepreneurial Team? International Small Business Journal, 23, 226-235. http://dx.doi.org/10.1177/0266242605052131
[13] Zhou, M. (2004) Revisiting Ethnic Entrepreneurship: Convergences, Controversies, and Conceptual Advancements. International Migration Review, 38, 1040-1074. http://dx.doi.org/10.1111/j.1747-7379.2004.tb00228.x
[14] Centre for Enterprise and Economic Development Research (2001) http://www.sbs.gov.uk/content/pdf/embf/BBA_Access_to_Finance_Research.pdf
[15] Siu, W.-S., Zhu, Y. and Kirby, D.A. (2003) The Interplay of Environment and Culture in Small Firm Marketing: A Comparative Study of the Marketing Practices of Chinese Small Firms in Hong Kong and The UK. Journal of Small Business and Enterprise Development, 10, 25-39. http://dx.doi.org/10.1108/14626000310461196
[16] Ram, M. and Jones, T. (2008) Ethnic Minorities in Business. 2nd Edition, Small Business Research Trust, Milton Keynes.
[17] Carter, S., Mwaura, S., Ram, M., Trehan, K. and Jones, J. (2015) Barriers to Ethnic Minority and Women’s Enterprise: Existing Evidence, Policy Tensions and Unsettled Questions. International Small Business Journal, 33, 49-69. http://dx.doi.org/10.1177/0266242614556823
[18] Bates, T. (2011) Minority Entrepreneurship. Foundations and Trends in Entrepreneurship, 7, 151-311. http://dx.doi.org/10.1561/0300000036
[19] Blanchard, L., Yinger, J. and Zhao, B. (2008) Do Lenders Discriminate Against Minority and Women Entrepreneurs? Journal of Urban Economics, 63, 467-497. http://dx.doi.org/10.1016/j.jue.2007.03.001
[20] Cavalluzzo, K. and Wolken, J. (2005) Small Business Loan Turndowns, Personal Wealth and Discrimination. Journal of Business, 78, 2153-2178. http://dx.doi.org/10.1086/497045
[21] Fraser, S. (2009) Is There Ethnic Discrimination in the UK Market for Small Business Credit? International Small Business Journal, 27, 583-607. http://dx.doi.org/10.1177/0266242609338756
[22] Edmondson, A. and McManus, S. (2007) Methodological Fit in Management Field Research. Academy of Management Review, 32, 1155-1179. http://dx.doi.org/10.5465/AMR.2007.26586086
[23] Boyce, C. and Palena, N. (2006) Conducting In-Depth Interviews: A Guide for Designing and Conducting In-Depth Interviews for Evaluation Input. Pathfinder International Tool Series: Monitoring and Evaluation 2.
[24] Li, P.S. (2005) The Rise and Fall of Chinese Immigration to Canada: Newcomers from Hong Kong Special Administrative Region of China and Mainland China, 1980-2002. International Migration, 43, 9-34. http://dx.doi.org/10.1111/j.1468-2435.2005.00324.x
[25] Witt, P. (2004) Entrepreneurs’ Networks and the Success of Start-Ups. Entrepreneurship and Regional Development, 16, 391-412. http://dx.doi.org/10.1080/0898562042000188423
[26] Dodd, S.D. and Patra, E. (2002) National Differences in Entre-preneurial Networking. Entrepreneurship and Regional Development, 14, 117-134. http://dx.doi.org/10.1080/08985620110111304
[27] Smallbone, D., Bertotti, M. and Ekanem, I. (2005) Diversification in Ethnic Minority Business: The Case of Asians in London’s Creative Industries. Journal of Small Business and Enterprise Development, 12, 41-56. http://dx.doi.org/10.1108/14626000510579635

Copyright © 2023 by authors and Scientific Research Publishing Inc.

Creative Commons License

This work and the related PDF file are licensed under a Creative Commons Attribution 4.0 International License.