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The ethics of lending

This week’s dilemma sees a financial institution facing the dilemma of whether or not to lend and support a brothel's payment systems. 

The brothel is a legally compliant business. The lender has no moral objections to prostitution but rather it comes with known risks of modern slavery and money laundering. Sex workers have a right to a job with a legally compliant business. 
Would you lend the money and take on this business as a customer?

We encourage you to post your answers in the comments so we can create a healthy discussion, with the aim of learning from our peers, becoming aware of differing perspectives and challenging our own biases.
Please share your ethical dilemmas with us - we can post them anonymously. You can email your dilemmas to dilemma@thebfo.org

Photo by DESIGNECOLOGIST on Unsplash


Adam Fletcher on Wednesday, 02 Oct 2019
Banks need clear ethical guidelines in place for their investment appetite. We need to be consistent and fair and explain our position. If we justify lending to gambling providers or pubs and clubs / casinos based on the premise that they are appropriately regulated and legal operations then we need to extend the same to other legal operations. If there are ethical concerns for the industry than we should work with them to adopt voluntary standards that demonstrate higher compliance.
Emma on Monday, 30 Sep 2019
Absolutely. There would need to be strict governance and processes in place to help monitor risk. There would also need to be a higher than legally required auditing practice taken on by the business, purely because of the increased risk in this industry too. If the business has a sound model and a history of a good track record it should be supported by our banking system. What is the alternative? An unsupported environment could throw the business into a vulnerable environment (loan shark, credit cards etc) and then be more susceptible and attractive to illegal entities.

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