Banks Reaching out to Ethnic Entrepreneurs
Oppenheim, Sara, American Banker
Peter Boland's business development efforts don't usually entail golf outings, Rotary Club lunches, or chamber of commerce dinners.
Instead, the Marine Midland Bank executive is more likely to spend his time dining on curries and rice pilafs to the strains of sitar music with Indian entrepreneurs in suits and saris.
Last November, Mr. Boland threw a two-week series of Hindu New Year parties throughout New York State to build ties to Indian-owned businesses, especially import-export firms.
"It's a great way of making a statement to the community," said Mr. Boland, a senior vice president in charge of trade finance for the Buffalo- based bank.
Increasingly, multi-national banks, such as Marine Midland's London-based parent, HSBC Group, and Union Bank of California's parent, Bank of Tokyo-Mitsubishi, are offering specialized trade services for ethnic small businesses in the United States.
And though their U.S. subsidiaries largely have the image of mainstream banks, their growing focus on ethnic and immigrant businesspeople is a recognition of the changing face of the country's small businesses.
More than half the American population will be nonwhite by the year 2050, according to U.S. Census Bureau projections.
The number of businesses owned by Asian-Americans increased 56% nationwide between 1987 and 1992-to 591,839-according to the most recent Census Bureau figures.
That means traditional lenders accustomed to doing business at the club will be forced to learn a new means of cultivating customer relationships.
Since Marine Midland formed its Asian business unit three years ago, the bank "cherry-picked" 85 of the largest Indian-owned import-export businesses away from other New York banks, Mr. Boland said. The bank has $225 million in used and unused lines of credit to Asian-owned businesses, he said.
Now the bank will promote its trade finance services to smaller Indian- owned businesses with annual sales ranging from $5 million to $10 million, Mr. Boland said.
The bank offers credit lines, letters of credit, document collection, and foreign exchange services; guarantees release of cargo; and provides credit information on potential trade partners.
"Indians are fantastic traders," Mr. Boland said "They are typically very frugal, high net-worth individuals, probably the most demanding customers a bank could ever get."
Mr. Boland said the bank promotes its services tailored to Indian, Pakistani, and Sri Lankan business owners at community cultural events and through groups like the Association of Indians in America. …