Mediating Effect of Access to Electronic Payment System on Currency Redesign Policy and SMEs Performance in Northeast-Nigeria

Abstract

This paper investigated the mediating role of access to electronic payment system (APS) on the relationship between currency redesign policy (CRP) and the performance of SMEs (PERF) in selected states (Adamawa, Bauchi, Gombe, and Yobe) in north-eastern Nigeria. The study used quantitative research approach and a multi-stage sampling technique was used to generate 300 responses using a research questionnaire. The partial least square structural equation modeling (PLS-SEM) technique was used to analyze data while the research model was examined using the disjointed two-stages approach. The study found a positive and significant mediating effect between CRP and PERF through APS. Equally, the direct paths were all found to be positive and significantly related. Meaning that not only does CRP affect PERF directly, but it also has an indirect effect on PERF through APS. This provided support for linking CRP and PERF through APS, and CRP and PERF, which doubles for validating the research model on the reflective-formative basis. Therefore, businesses are encouraged to utilize the usefulness of APS for doing transactions, which will double for achieving better PERF under the current CRP regime. This will have implication as the government is reintroducing the CRP as one of the measures of addressing inflation in Nigeria. On this note, the study concluded that APS is the most crucial factor in the implementation of CRP. Although, this cannot be generalized due to the concentration of the study in one region of the country, but future studies are encouraged to extend the scope of research to establish a basis of generalization.