ABSTRACT

The study is one "The effect of bank merger and acquisition on small business lending in Nigeria". The researcher set to explain the effect of merger and acquisition on bank lending behavior the effect is divided into four. One is the static effect and the other three are types of dynamic effect, restructuring effect, direct effect and external effect. Entangling these four effects allowed us to identify how mergers and acquisition affect small business lending. The data was collected using secondary data and multiple regression technique was adopted in analyzing the model. The following are our summarized findings; static effect, it is evident that the larger the size of a bank by M&A, the more it tends to small businesses; restructuring effect, change in banking focus, resulting in poor lending to small businesses even with M&A; it also revealed a poor reaction of other lenders besides micro-financial institution in the local market to opportunities created by the restructuring and direct effect of M&A is good for the economics development of Nigeria. It is recommended that measures be put in place to enable existing banks in the country to increase in size or capital base so that the banks can make more funds available for small business lending. Key players in the banking sector should consider both the static and dynamic effects of bank merger and acquisition should the need arise to consolidate the sector again in the near future. Government through the central bank of Nigeria should examine the policy of already consolidated banks to ensure the banks do not change its focus away from providing adequate loan facility to small businesses. Cooperative societies and other non-banking institution should be sensitized to lend fund to small businesses in their localities as this measure can held grow our economic. The researcher believes that his methodology represents an extension of the existing research literature that may be usefully applied elsewhere. In particular, the inclusion of the static and dynamic effects of all of the major types of bank ownership in the model is important to avoid potentially biased and misleading results.