EFFECT OF MERGERS AND ACQUISITIONS ON COMMERCIAL BANK CREDIT TO SMALL BUSINESSES IN NIGERIA
This study investigated the effect of mergers and acquisitions on commercial bank lending to small businesses in Nigeria (1992-2014). The central aim of the study is to evaluate the effect that mergers and acquisitions of commercial banks’ will have on their lending to small businesses in Nigeria. This study used Ordinary Least Square (OLS) function and multiple regression model methodology to carry out its test and analysis.. The results revealed that mergers and acquisitions (MAA) had negative and significant effect on commercial bank lending to small businesses in Nigeria (CBLSB) .Moreover, the findings also established that bank lending rate (BLR), liquidity ratio (LQR) and cash reserve ratio (CRR) all had positive but insignificant impact on commercial bank credit to small businesses (CBLSB) in Nigeria. The study therefore recommended that: the monetary authorities should reintroduce the policy of mandating commercial banks, to allocate a fixed percentage of their total loan and advances to small and medium scale enterprises in Nigeria. Also, that the government should monitor the credit activities of commercial banks to small businesses in a bid to ensure that small businesses are properly financed by commercial banks in the years ahead. Moreover, the Central Bank of Nigeria should make cheap funds available for small businesses in order to save from the hands of commercial banks who lend more when the lending rate is high.
|Keywords: Mergers and Acquisitions, Small Businesses, Bank Lending Rate, Liquidity Ratio|
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