How do institutional biases in lending practices restrict financial opportunities for underprivileged groups, and how do they perpetuate economic inequalities?

Abstract

This paper explores how systemic barriers, specifically institutional biases, disproportionally restrict business opportunities for underprivileged groups through data analysis and literature review. This paper also highlights how biases in loan approval criteria and interest rates create systemic barriers. Minority-owned businesses and low-income entrepreneurs face significant challenges in securing necessary business loans and venture capital. This paper examines these biases and proposes possible strategies to reduce them and promote financial inclusion.