Billionaire Robert F. Smith is once again wielding his power for good. The tech investor is working to address the disproportionate way Black people and other communities of color are disproportionately impacted by the covid-19 coronavirus pandemic.
“As a good friend of mine has said, this is a pandemic on top of a series of epidemics,” Smith said. “I think the important thing that we have to do is continue to rally as Americans to come with real, lasting, scalable solutions to enable the communities that are getting hit first, hardest, and probably will take the longest to recover, with solutions that will enable their communities to thrive again.”
Smith made the statements during an interview with Chuck Todd on “Meet the Press” after Todd asked him what America’s rescue plan should be for vulnerable communities of color. Todd cited the nearly 17 percent unemployment rate of Black Americans, the over 18 percent unemployment rate for Latino Americans and said the pandemic has been like “an MRI on inequality.”
Known for his philanthropic generosity – most notably paying off the entire student loan debt of Morehouse College’s 2019 graduating class – Smith said he’d be working with politicians in Washington, community leaders and fintech companies “to enable these banks to really drive some economic opportunities back in these communities.”
The immediate goal is to ensure the second wave of funding from the SBA’s Paycheck Protection Program (PPP) would not leave countless small business owners without assistance in favor of big companies like it did the first time – particularly those owned by Black people and other people of color.
Smith called the PPP’s botched rollout an “erosion of the capillary banking system in America,” noting the most vulnerable customers in need of the greatest assistance typically don’t bank with big banks.
“I think it (PPP) needs to be reimagined. We have to take this opportunity to reinvest in our business infrastructure in these small to medium businesses, in our banking infrastructure and what I call these capillary banking systems, so that we can actually emerge out of this even stronger,” Smith said.
The founder of Vista Equity Partners, Smith called for investing in technology and software so banking institutions that serve the hardest hit communities can be better equipped to help customers.
“We have to invest in technology and software so that these capillary banking systems are more efficient; they have more access to capital; (and) they have more transparency,” Smith said. “They actually then can engage with these businesses that are in the communities that are frankly underbanked and, in many cases, not banked at all.”
Citing stats which include 94 percent of Black-owned businesses being sole proprietorships and 70 percent being either underbanked or non-banked, Smith said there were many “banking deserts” in vulnerable communities. He added said America would “be remiss” if it didn’t “take a significant portion of capital to reinvest in the infrastructure of delivering capital back into those businesses.”
“It is our opportunity even though we’re in a challenging time … we have to reinvest so when we come out on the backend of this pandemic, we’re actually in a much better position,” Smith said. “It takes a community of people … politics aside concerned about the citizenry here … to invest in the dynamic. I see that and have a chance to engage in a way that gives me optimism.”
Written by Isheka N. Harrison