Houston is the most racially and ethnically diverse city in the nation. But even here, minority-owned businesses face serious difficulties competing with those owned by white males. Joset Wright-Lacy is president of the National Minority Supplier Development Council. She joins Andrew Schneider on this week’s “Bauer Business Focus.” MBEs in Houston generate over $17 billion a year for the state and local economies, but many still face discrimination when trying to raise capital.
What impact do Houston-based MBEs have on the economies of Houston and of Texas as a whole?
“Recently, the Houston Minority Supplier Development Council conducted a study of the economic output of its 677 minority business enterprises, and they determined that those MBEs created 67,000 new jobs [per year], they generated $1.4 billion in tax revenue [for federal, state, and local governments]…and they had an economic impact or output, if you will, of $17.1 billion.”
What is the biggest challenge facing MBEs today, either in Houston or nationally?
“There are no differences in the challenges that MBEs face, whether they’re in Texas, Louisiana, New York, [or] Chicago. Generally speaking, the number one challenge facing minority businesses is access to capital. It has been that way for at least 40 years.”
Why is access to capital such a difficult problem to solve?
“About a year and a half ago, I served on a national advisory committee for minority businesses [at the U.S. Department of Commerce], and I looked at this issue of access to capital. And we had MBEs that had great wealth profiles, great credit profiles, but the terms and conditions that they got from lending institutions were very different [from non-minority owned businesses]. …We know that there’s bias in the system. Sometimes that bias is unconscious, and sometimes that bias is conscious.”