Funding Small Scale Entrepreneurs and other Issues for Banking Reforms in Nigeria

Abstract

In this paper; the researcher raised four political issues in connection with banking reforms in Nigeria. The first was the politics producing selection adversity against small and medium-scale enterprises (SMEs) concerning their funding. The second was the politics producing bank support/bail out with taxpayers’ money. The third was the stealth economic hegemonic politics producing bank consolidation through mergers and acquisitions and the proposed sale of troubled banks to ‘core foreign investors’. The fourth issue was the politics producing ethical crises in banks. The limited objective of the study, therefore, was to argue out and substantiate these claims. Analysis of the empirical data led, among others, to the finding that, although banks were unwilling to finance SMEs, these banks were supported/bailed out with money from taxpayers, who included the owner-managers of these SMEs. It was also found that mergers/acquisitions and proposed sales of troubled banks to core foreign investors tended to institute oligopolistic or monopolistic banking practices and lend to predatory capitalism the facility for “accumulation by dispossession” through de-industrialization and global economic hegemony. Among other policy implications, it was suggested that the monetary authorities monitor and ensure that banks lend to SMEs the funds accumulating in the small and medium enterprises equity investment scheme (SMEEIS) or continue to transfer them to the Bank of Industry (BOI) for on-lending to SMEs. It was also suggested that since most SMEs are rural-based, the monetary authorities open branches of the BOI in rural areas to increase the access of SMEs to the services of the bank by accommodating these SMEs.