Youth, adolescence, and maturity of banks: credit availability to small business in an era of banking consolidation

Empirical evidence indicates that lending to small businesses is negatively correlated with the age and size of banks. This observation can be gleaned from a sample of banks with less than $500 million in assets for the period 1993-1996 and which were 25 years or younger at the time. In addition, small business lending is positively correlated with higher concentration rates in urban areas but negatively correlated with higher concentration in rural areas. These empirical findings suggest that bank consolidation has significant effects on small business lending.