Abstract:
The resultant impact of financial liberalization opened up the Nigerian economy to global financial markets, which has generated increasing apprehension in the economy and has exposed the fragility and vulnerability of the financial system. It is therefore imperative for the central Bank of Nigeria to introduce measures that will reduce the exposure and enhance the stability of small business in the nation’s financial system. A defensive measure that will strengthen the existing banks and still provide small businesses with financial facilities and services is what is really needed. This study investigated the impact of previous recapitalization in the banking system on the performance of some selected small businesses in the country with the aim of finding out if the recapitalization is of any benefit. The study employed both primary and secondary data obtained from responses gotten from banks, investors, government public, and customers. The data were analyzed using both descriptive e.g. means and standard deviations and analytical techniques. It was found that the mean of key profitability ratio such as the yield on earning asset, Return on equity and Return on Asset were significant meaning that there is statistical difference between the mean of the bank before 2001 recapitalization and after 2001 recapitalization.The study recommends that the banks should improve on their total assets turnover and to diversify their funds in such a way that the can generated more income on their assets, so as to improve their return on equity. As a result of the findings, recommendations were made and some of them are:Recapitalization should be sustained until Nigerian banks are among the first 100 banks in the world. Standard regulations should be enacted in order to control banks services to prevent exploitation tendencies various types of competitions should be stimulated thereby pushing Nigerian banks towards global trends.
