TITLE:
Review of the Naira Redesign and Its Effect on Micro, Small, and Medium Enterprises (MSMEs)
AUTHORS:
Moradeyo Adebanjo Otitoju, Godbless Friday Safugha, Esther Oshofuneh Vincent, Chinasa Mary Chukwu
KEYWORDS:
Naira Redesign, Cash Crunch, Micro, Small and Medium Enterprises (MSMEs), Cashless Policy Currency Redesign
JOURNAL NAME:
Advances in Applied Sociology,
Vol.13 No.9,
September
27,
2023
ABSTRACT: Micro, Small, and Medium
Enterprises contribute 48% of Nigeria’s GDP and account for 96% of businesses
and 84% of employment. Despite their significant economic impact, MSMEs face
challenges that make growing and scaling their businesses difficult. These
challenges include limited access to finance, poor digital skills, inadequate
record-keeping, over-reliance on cash, and difficulty attracting skilled
workers. The naira redesign, cashless policy, and the resultant cash crunch
have exacerbated these problems, making it harder for MSMEs to survive. The reduced
cash withdrawal limits, particularly, have hit small businesses hard, resulting in decreased sales volumes and economic slow- down. As a result, the
policy has hurt MSMEs without access to digital payment platforms. This paper focuses on reviewing the naira redesign and its effect on MSMEs. As a recommendation, the
government and the Central Bank of Nigeria
(CBN) should invest in infrastructure development, digital skills training, and creating an enabling regulatory
environment for fintech solutions aimed at MSMEs.