Consolidation and Credit Access Risk in Rural Nigeria: Impact Assessment after a Decade of Implementation.

Abstract

This study examines the effect of consolidation of Deposit Money Banks (DMBs) on credit access risk in rural areas of Nigeria after a decade of the consolidation exercise. Secondary data on total value of credits to rural areas was obtained from the CBN bulletin for the period 1994 to 2014. This period includes 10 years of pre consolidation and 10 years of post-consolidation. Mann Whitney U test was used in analysing the data to test for significant difference in the total credit to rural areas before and after consolidation in Nigeria. The result revealed that there was a significant increase in access to DMBs’ credit by rural customers of DMBs in the post consolidation era when compared to the pre-consolidation era. The result may be is explained by the role of technology in banking. It is recommended amongst others that government should provide infrastructures like good access roads to the rural areas, electricity and support investments in Information and Communication Technology (ICT) in the rural areas as this will encourage the penetration of financial services into the hinterlands.