Rethinking Banks Corporate Social Responsibility (CSR) in Nigeria

The Nigerian economy is faced with a multiplicity of challenges ranging from high unemployment rate, poverty, corruption, youth restiveness, security and political crises which threatens investments, economic growth and the goal of the Nigerian banks to be the financial hub of Africa in the year 2020 as well as the nation’s goal to be one among the top 20 largest economies in the world by the year 2020. Since banks provide linkages to all sectors of the economy, there is need for the Nigerian banks to rethink Corporate Social Responsibility (CSR) in all the key sectors (such as education, power, health, agriculture, and small and medium-sized enterprises) of the economy. This study examines how socially responsible is the Nigerian banks in addressing these challenges and enhancing the economic growth of Nigeria through Small and Medium Scale Enterprises (SMEs) financing, which is one of the key sector that can drive the economic growth of the nation. Using the data on commercial banks loans to SMEs provided by the CBN statistical bulletin for the period of ten years (from 2001-2010). The results of the descriptive statistics and sample t-test shows that, bank consolidation in Nigeria has led to a decline in SMEs financing to less than one percent on average in the study period, and there is no significant improvement in SMEs financing in Nigeria before and after bank consolidation. This clearly indicates that Nigerian Banks are not committed to their CSR (economic responsibilities) of financing to SMEs which is critical in mitigating these economic challenges and enhancing economic growth. The study recommends among others that, there should be further diversification in SMEs financing. In order to improve the CSR of Nigerian banks, there is also the need for banks to help in the training of SMEs owners as a matter of necessity on the need to maintain proper accounting records in the country.