Netflix will shift US$100 mln of cash into Black-owned banks

NETFLIX will shift up to US$100 million to lenders that serve the Black community, making it the largest company yet to pledge cash to historically underfunded financial institutions.

The online TV giant will start by shifting US$ 25 million into the Black Economic Development Initiative, a new fund that will invest in Black-owned financial institutions serving low-income communities, and US$10 million to Hope Credit Union. Going forward, the company will steer 2 per cent of its cash on hand, which currently amounts to about US$ 5 billion, to financial organiSations that directly support African-American communities.

Large US companies have rushed to show support for African Americans following the death of George Floyd, one of several Black people killed by police in the past few months. Many businesses and rich individuals have pledged money to civil rights causes, including Netflix CEO Reed Hastings, who earmarked US$120 million of his personal fortune to historically Black colleges and universities. But his company wanted to propose a solution that addresses more systemic causes of inequality.

Hope Credit Union serves more than 1.5 million people in states including Alabama and Louisiana, but it doesn’t have enough money to fully support the financial needs in its communities, according to its CEO, Bill Bynum.

“We are capital- starved, just like the people in the communities we serve,” Bynum said.

“Having a global voice like Netflix say it’s important to invest in financial institutions like Hope is tremendously important, not just for the capital we will use to make mortgage loans and small business loans, but for what it says.”