A Critical Analysis on the Effect of E-naira on SME’s in Nigeria
CHAPTER ONE
Objective of the study
The broad objective of this study is to present a critical analysis on the effect of e-naira on SME’s in Nigeria. Specifically the study seek to:
- Identify the challenges faced by SMEs which will be revolved through the use of e-Naira platform.
- Investigate if e-Naira platform will facilitate swift flow of financial transaction and retail payment between SMEs and her customers.
- Investigate if e-Naira promotes efficient and straightforward cross-border transactions for SMEs.
CHAPTER TWO
REVIEW OF RELATED LITERATURE
Concept of eNaira
E-Naira is a unique form of money issued by the Central Bank of Nigeria as a form of digital currency. eNaira is a medium of exchange and a store of value, offering better payment in retail transactions when compared to cash payments. The launch of the eNaira is a result of several years of research by the CBN in expanding the boundaries of the payments system to make financial transactions easier and flawless for every stratum of society. Following a series of engagements with relevant stakeholders, the CBN designed the eNaira, which was lunch on Monday, October 25, 2021. eNaira is designed to serve as actual money that enables its holders to transact with it like fiat currency without the involvement of intermediaries as is the case with other payment platforms. naira is expected to reduce the cost and time of transactions and simplify cross-border transactions due to the elimination of intermediaries. It can also give room for unbanked Nigerians to transact without a private bank account. eNaira is supplied by the CBN (from their Stock Wallet) to licensed financial institutions which they received in their treasury wallet for onward supply to individuals. eNaira transactions is facilitated by the Nigerian central switch i.e. the Nigeria Inter-Bank Settlement System Plc (NIBSS). The operating model of eNaira. has four major parties; (i) The CBN; (ii) the licensed financial institutions responsible for issuing eNaira to customers and monitoring digital transactions under their institution; (iii) Businesses and Merchants who are responsible for adherence to the CBN regulations: (iv) Customers responsible for maintaining an eNaira wallet). In realization of the disintermediation risk, which CBDC theorists have agreed would trigger bank runs, the daily transaction and cumulative balances are capped at N500,000 and N5,000,000 respectively for the top users, who are required to have account numbers with BVN and bank accounts, while the second top users are tied to maximum daily transactions and cumulative balances of N200,000 and N500,000 respectively. The least users are entitled to a maximum daily transaction and cumulative balances of N20,000 and N120,000 respectively and are only required to hold telephone numbers while awaiting the National Identity Number (NIN). This segment will cover millions of financially excluded Nigerians. The guideline also allows users with both phone numbers and NIN to have daily transaction and cumulative ba lances of N50,000 and N300,000 respectively, while corporate users can create wallets without limits. The CBN has argued that eNaira will contribute to the deepening of financial inclusion in the economy, but some practitioners have disagreed with this notion, noting that, the level of financial illiteracy among the citizens will limit the adoption to the elite, as millions of illiterate Nigerians might be unfit to key into the system. This has fuelled the researcher’s motivation to ascertain the key factors that will facilitate the adoption of eNaira among MSMEs in Nigeria.
CHAPTER THREE
RESEARCH METHODOLOGY
INTRODUCTION
In this chapter, we described the research procedure for this study. A research methodology is a research process adopted or employed to systematically and scientifically present the results of a study to the research audience viz. a vis, the study beneficiaries.
RESEARCH DESIGN
Research designs are perceived to be an overall strategy adopted by the researcher whereby different components of the study are integrated in a logical manner to effectively address a research problem. In this study, the researcher employed the survey research design. This is due to the nature of the study whereby the opinion and views of people are sampled. According to Singleton & Straits, (2009), Survey research can use quantitative research strategies (e.g., using questionnaires with numerically rated items), qualitative research strategies (e.g., using open-ended questions), or both strategies (i.e., mixed methods). As it is often used to describe and explore human behaviour, surveys are therefore frequently used in social and psychological research.
CHAPTER FOUR
DATA PRESENTATION AND ANALYSIS
INTRODUCTION
This chapter presents the analysis of data derived through the questionnaire and key informant interview administered on the respondents in the study area. The analysis and interpretation were derived from the findings of the study. The data analysis depicts the simple frequency and percentage of the respondents as well as interpretation of the information gathered. A total of eighty (80) questionnaires were administered to respondents of which only seventy-seven (77) were returned and validated. This was due to irregular, incomplete and inappropriate responses to some questionnaire. For this study a total of 77 was validated for the analysis.
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATION
Introduction
It is important to ascertain that the objective of this study was to ascertain a critical Analysis on the effect of E-naira on Sme’s in Nigeria. In the preceding chapter, the relevant data collected for this study were presented, critically analyzed and appropriate interpretation given. In this chapter, certain recommendations made which in the opinion of the researcher will be of benefits in addressing the challenges of a critical Analysis on the effect of E-naira on Sme’s in Nigeria
Summary
This study was on a critical Analysis on the effect of E-naira on Sme’s in Nigeria. Three objectives were raised which included; Identify the challenges faced by SMEs which will be revolved through the use of e-Naira platform, Investigate if e-Naira platform will facilitate swift flow of financial transaction and retail payment between SMEs and her customers and Investigate if e-Naira promotes efficient and straightforward cross-border transactions for SMEs. A total of 77 responses were received and validated from the enrolled participants where all respondents were drawn CBN. Hypothesis was tested using Chi-Square statistical tool (SPSS).
Conclusion
Technological innovations in the financial system have resulted in the emergence of cashless societies in many parts of the world. Central Bank of Nigeria Digital Currency (CBDC), also known as eNaira, was proposed as one of the most important forms of electronic payment in Nigeria. To achieve the goal of actualizing the digital economy in Nigeria, customer acceptance of electronic payments (eNaira) is necessary. Therefore, this is an attempt to determine key factors that derive eNaira acceptance among MSMEs in Nigeria.
Recommendation
The findings of this paper can be useful to CBN in finding ways to make eNaira more acceptable, thereby creating more awareness about eNaira among the public and the MSME sector in particular; enhancing eNaira security features; providing support interventions using eNaira, and routing government financial transactions through eNaira wallets.
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