ISSN 2736-1721
Global Journal of Business Management ISSN 6731-4538 Vol. 2 (12), pp. 001-011, December, 2008. © International Scholars Journals
Full Length Research Paper
Effects of bank mergers and acquisitions on small business lending in Nigeria
Francis Kehinde Emeni1 and Chinwuba Okafor2*
1,2Department of Accounting, Faculty of Management Sciences, University of Benin, Benin City, Nigeria.
Accepted 20 August 2008
Abstract
Merger and Acquisition (M&A) is one of the instruments of the recent banking reforms in Nigeria. One of the implications of the reform is its effect on the lending to small businesses, which was divided into static and dynamic effect (restructuring, direct and external) in this study. Data were collected by cross-sectional survey research design and were subsequently analyzed by the ordinary least square method. The analyses show that bank size, financial characteristics and deposit of non -merged banks are positively related to small business lending, while for merged banks the reverse is the case. From the above result, it is evident that M&A have not only static effect on small business lending but also dynamic effect, therefore, given the central position of small businesses in the current government policy on industrialization of Nigeria, policy makers in Nigeria should consider both the static and dynamic effects of M&A on small business lending in their policy thrust. JEL: G21
Key words: Bank lending, small businesses, mergers and acquisition.