MONETARY POLICY AND THE PERFORMANCE OF SMALLMEDIUM-SCALE ENTERPRISES IN NIGERIA (2013-2023)

The study investigated the effect of monetary policy and SMEs performance in Nigeria from 2013 to 2023. Various monetary policies, have been adopted by the government over the years, through Central Bank of Nigeria. Despite the increasing emphasis on the regulation of monetary policy, the problem surrounding the performance of SMEs still persists. Such problems include high interest rate and unstable exchange rate. The main objective of this study was to examine the effect of monetary policy on the performance of SMEs in Nigeria. The research design adopted for this study was ex-post-facto research design, Vector Error Correction Model (VECM), and Granger Causality Test were required to investigate the effect of monetary policy on small and medium scale enterprises performance in Nigeria. Inferential statistics were used to analyze the time series data, whereas the Johansen cointegration approach was employed to test for the long-run relationship among the series. The findings revealed that there was a significant effect between interest rate (INTR) (0.0327), exchange rate (EXRT) (0.0245) and performance of SMEs in Nigeria. Therefore, the study recommends that monetary policy should be set in such a way that the objective it wants to achieve is clearly and transparently defined in response to the dynamics of the domestic and global economic developments for the performance of Small and medium scale enterprises in Nigeria.

1 22 Mar, 2024

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