The effects and challenges of naira redesigned on small and medium enterprises among Maiduguri University and Tasha Bama Market


The redesign of a country’s currency can have far-reaching effects on various sectors of the economy, including small and medium enterprises (SMEs). This discussion aims to explore the effects and challenges faced by SMEs in Maiduguri University and Tasha Bama Market following the redesign of the Naira. By analyzing these case studies, we can gain insights into the broader implications of currency redesign on the operations, profitability, and adaptability of SMEs.

One of the significant effects of currency redesign on SMEs is increased transaction costs. When a currency undergoes a redesign, new banknotes or coins are introduced, leading to additional costs for businesses. SMEs, which often rely on cash transactions, may need to recalibrate cash registers or update payment systems to accept the new currency denominations. This can be financially burdensome, especially for small businesses with limited resources (Jones, 2018).

Furthermore, the redesigned currency requires SMEs to adapt to new features, security measures, and denominations. This adaptation process may involve additional training and education on counterfeit detection and authentication. SMEs need to invest time and resources in educating their staff, which can disrupt business operations in the short term (Cetorelli et al., 2020).

Cash flow management is another area where SMEs face challenges following a currency redesign. As new notes and coins enter circulation, business owners must carefully manage their cash holdings to ensure a smooth transition. This can involve exchanging old currency for new, which poses logistical challenges, particularly in regions with limited banking infrastructure like Maiduguri and Tasha Bama Market

Moreover, the redesign of the Naira can impact consumer behavior and spending patterns. Initially, consumers may be hesitant to accept or use the new currency, leading to a temporary decline in sales for SMEs. Changes in denominations and aesthetics can also affect perceptions of value and may require small businesses to reconsider their pricing strategies (Siba & Olatunji, 2021).

One of the primary challenges faced by SMEs in the context of currency redesign is a lack of awareness. Many SMEs in Maiduguri University and Tasha Bama Market may not have access to sufficient information about the redesigned Naira. Government efforts to educate and raise awareness about the currency redesign need to reach all businesses, especially those operating in remote areas. Limited access to information can result in confusion, mistrust, and difficulties in adapting to the new currency (Adamu, 2020).

Counterfeit risks pose another significant challenge for SMEs during a currency redesign. While currency redesign often incorporates enhanced security features, the transition period may witness an increased risk of counterfeit currency circulation. SMEs, especially those with limited expertise and resources, may struggle to differentiate between genuine and counterfeit notes. Counterfeit currency can adversely affect business operations and erode trust among customers (Cukierman & Yuen, 2019).

Additionally, the redesign of the Naira may pose challenges to financial inclusion efforts. SMEs operating in informal sectors or remote areas may face difficulties in accessing banking services or exchanging their old currency for the new one. Lack of awareness, documentation, or banking infrastructure can hinder SMEs’ ability to adapt to the redesigned currency, exacerbating financial inclusion challenges (Adewole et al., 2017).


The redesign of the Naira has both positive and negative effects on SMEs in Maiduguri University and Tasha Bama Market. While increased transaction costs, adaptation and training, cash flow management, and changes in consumer behavior pose challenges to SMEs, a lack of awareness, counterfeit risks, financial inclusion challenges, and economic instability further complicate the transition process. To mitigate these challenges, government efforts should prioritize inclusive education, support SMEs in adapting to the new currency, and ensure smooth cash exchange processes. A well-executed currency redesign can facilitate the growth and resilience of SMEs in Nigeria’s economy.


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  • Cetorelli, N., Mandel, B., Pradhan, M., & Urua, E. I. (2020). Effects of Government Intervention on Small Business Credit: Evidence from the Great Recession. Journal of Financial Intermediation, 41, 1-19.
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