“One of the advantages of being disorderly is that one is constantly making exciting discoveries.”

Minority banks in the US form a meagre 2% of the entire banking fraternity but the importance of such banks in the American community cannot be ruled out. Ask any Economic pundit and he will tell you that minority banks form an essential fabric of the American Banking Community.

Given the precarious times of the current economic slowdown, investors are vying for fresh avenues where they can get handsome returns. Even in the time of recession, many investors believe that they can rake in huge profits by investing in sensible entities. One such entity that has come under the radar of analyst across the globe is a minority owned bank. The reason for such popularity is very simple. It’s due to the fact that minority banks offer hefty advantages over their peers.

First and the foremost thing that is associated with minority owned banks is that they operate in a national workplace which offers a high profit opportunity. Given the fact that the Hispanic population is increasing rapidly in the United States, the advantages of a minority banks become that much potent. It is expected that the buying power of minorities will rise by leaps and bounds in the days that follow, making the role of minority banks more crucial than ever. To put this in figures, it is expected that minorities will account for around $1.7 trillion of purchase in the United States by the end of 2010.

Minority banks do not have good managers as top level executives get better pay options elsewhere. However, minority banks form great customer loyalty amongst ethnic groups due to historic ill treatment of such people by traditional banks. This loyalty base can be tapped into if you invest in a minority bank. It can help the investors form a good rapport with a new customer base. Given the fact that minorities are getting more money in their pockets with each passing year, the time is ripe to invest in a minority owned bank.

Robin Trehan, B. A, MIB, MBA is a financial and M&A expert.