Regulatory Framework of Commercial Banks and its Operational Efficiency in Lending to Small Medium (SMEs) in Nigeria

  • Amalachukwu Juliana Anigbo

    Student thesis: Doctoral Thesis


    The commercial banks in Nigeria have undergone many bank reforms after several periods of financial crisis with efforts to improve the bank operational efficiency. These several periods of financial crisis were attributed to inadequate regulatory framework, quick shift of banking reform to another and lack of proper implementation. However, there is no clear evidence of the impact of the bank regulatory framework on the operational efficiency of commercial banks in Nigeria. With Small Medium Enterprises (SMEs) being the major populace of the economy, there is a gap in the financial services provided by the commercial banks to SMEs. This research is underpinned by intermediation theory and elaborated with public and private theory views on regulation, and the pecking order theory. The study examines bank regulatory framework relating to commercial bank lending to SMEs, and its impact on operational efficiency of banks in Nigeria.

    The study employed the mixed method design, which combines quantitative and qualitative research. Primary data were obtained from two sets of semi-structured questionnaires: one set from top bank officials from twenty main commercial banks, and the other set from entrepreneurs from recognised associations. The data were
    analysed using descriptive statistics, chi square, cross tabulation tests and logistic regression of SPSS, while the qualitative data involved the use of NVivo to thematically analyse. Secondary data of commercial banks’ lending to the private sector in Nigeria were also utilised to complement the analysis of the study.

    The findings from the data analysis of the primary data obtained from the commercial banks present bank ownership and bank lending technology as the significant factors which influence operational efficiency of commercial banks’ lending to the SMEs. In addition, interest rate and collateral were the most important factors ranked by the SMEs to be influencing bank lending to them. Moreso, the finding from the qualitative analysis illustrated other factors perceived from commercial banks and the SMEs were grouped into regulatory factors, bank, SMEs, and Entrepreneur’s characteristics factors.

    In conclusion, policymakers can be well informed with the best combination of bank regulatory factors that will improve the operational efficiency of commercial bank lending to SMEs in Nigeria.
    Date of Award2023
    Original languageEnglish
    SupervisorAtsede Woldie (Supervisor) & Brian Telford (Supervisor)

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