EFFECT OF CASHLESS AND CURRENCY REDESIGN POLICY ON THE SMALL AND MEDIUM SCALE INDUSTRIES IN NIGERIA (1998-2025)

This study delves into how cashless payment systems and currency redesign policies have impacted the performance of Small and Medium Scale Industries (SMEs) in Abuja Metropolis, Nigeria, from 1998 to 2025. The motivation behind this research stems from the need to evaluate the effects of monetary and payment system reforms introduced by the Central Bank of Nigeria on SME performance, particularly in terms of profitability, operational efficiency, growth, and sustainability. Utilizing a quantitative research design, the study relied on secondary data gathered from the Central Bank of Nigeria (CBN), the National Bureau of Statistics (NBS), and the Nigeria Inter-Bank Settlement System (NIBSS). For data analysis, descriptive statistics and multiple regression analysis using the Ordinary Least Squares (OLS) technique were applied. Four hypotheses were tested throughout the study. The findings indicated that electronic payment transactions and financial inclusion initiatives associated with the cashless policy positively influence SME performance in Abuja Metropolis. Conversely, the currency redesign policy was found to have a significant negative short-term impact on SME operations, primarily due to cash shortages and liquidity issues. The combined effects of both the cashless and currency redesign policies were statistically significant, suggesting that they jointly affect SME performance. In conclusion, while the cashless policy boosts SME performance, the currency redesign policy can cause temporary disruptions that hinder business operations. The study recommends enhancing digital infrastructure, strengthening financial inclusion strategies, and improving the planning of currency-related reforms to support the sustainability of SMEs in Nigeria.