The Effect of Pre-Post Bank Consolidation on the Accessibility of Finance to SMEs in Nigeria

Abstract

Small and Medium Enterprises (SMEs) has been acknowledged as tool for solving basic economic problem of unemployment as it plays a significant role in economic growth and development. The Nigerian banks were characterised by poor capital base to foster economic development and growth, hence the need for consolidation. This study was carried out to ascertain whether bank consolidation exercise in Nigeria had improved accessibility of finance to SMEs in Nigeria or not. This study uses empirical analysis (Ordinary Least Square). The study found out that banks’ consolidation has failed to foster a vibrant and competitive SMEs sector that could enhance job creation and economic growth in Nigeria, thus the need for government intervention. This study, therefore, submits that the government should evolve a workable policy at directing banks to channel finance to SMEs so that bank can play an active developmental role to achieve economic growth and development in Nigeria.