Smith told Reuters that small Black-owned businesses in the United States needed more help to overcome chronic challenges in accessing capital that have been exacerbated by the COVID-19 pandemic.
"The average small business has two months of working capital. These business had two weeks," Smith said as part of a new Reuters series of video interviews called "What Works."
Racial inequities have come into sharp focus in the United States after George Floyd, an unarmed Black man, died in Minneapolis in May after a police officer kneeled on his neck for more than eight minutes. Floyd's death sparked protests around the world.
Smith, who according to Forbes is the wealthiest African-American, said he was pushing lawmakers who approved a $2 trillion COVID-19 economic relief bill in March to make more small-business aid, such as the Paycheck Protection Program, accessible to Black communities.
Roughly 70% of the African-American community does not have access to a bank branch, Smith said, leaving many Black people to rely on financial institutions specifically targeting minorities and economically disadvantaged areas.
Smith, who grew up in the United States during the late 1960s Civil Rights era and now runs a buyout firm that focuses on investing in software companies, said he now sees a more broad-based coalition of support for equality for Black people.
Smith, the first African-American to sign Warren Buffett and Bill and Melinda Gates'"Giving Pledge," has supported Black people extensively in his philanthropic efforts.
Last year, he pledged to pay off the student loan debt of the class at 2019 at the historically Black Morehouse College.
ROBERT SMITH: As the pandemic really started to roll through America, it started affecting the small and medium businesses much more dramatically than the larger companies. A number of them didn't have access to capital, didn't have access to the banking system, and the African-American communities in particular didn't have access to what I call some of the established banking systems.
70% of African-American communities don't have a branch bank. They rely on what are called community-development financial institutions or minority depository institutions for funding. I think the number is over 60% of the homes that are financed by African-Americans or for African-Americans come out of these what I call the capillary banking system.
The average small business in America has about two months of working capital. Many of these businesses had two weeks of working capital. I think, again, what we are witnessing is, again, decades and generations of social and economic injustice, particularly as it relates to the African-American community.
And it was the silence of the pandemic, i.e. sheltering at home, that gave us all a chance to witness certain acts against the African-American community. The killing of George Floyd, Ahmaud Arbery, and Breonna Taylor in particular, those three in that period of time that raised the consciousness and the humanity of Americans and people throughout the world in saying this is just wrong. This is unjust and enough is enough.
I'd give the young people credit. They got out into the streets immediately, and said this just cannot stand. And I think we're in store for real change.