Abstract

Francis Kehinde and Chinwuba Ekene

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 crosssectional 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.