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SME Guide

Nigerian Cash Shortage Hits Small Businesses Hard Amid Financial Inclusion Efforts

The ongoing cash scarcity in Nigeria has left small business owners and petty traders frustrated as they struggle to operate cash-based businesses. Farmers and traders in rural areas say the lack of accessible cash is taking a major toll.

Some have stopped banking funds to prevent getting trapped without cash access. Others only sell to those able to pay in physical cash to ensure they can restock and conduct transactions. This comes despite assurances from the Central Bank of Nigeria (CBN) that adequate cash exists within the economy.

Experts warn the cash crunch threatens recent financial inclusion drives that get rural businesses and individuals proper bank accounts. It may diminish trust if banking money provides no guarantee that it can be withdrawn when needed.

“Many owing me haven’t paid as they can’t get cash from banks. It’s badly affecting my farm business, which is cash-based,” said Dele Bamigboye, a farmer in Igboho, Oyo State. “My profits are now trapped with no way to withdraw needed physical cash.”

Mama Kudi, a trader in Ogidi, said, “I only sell to those with cash in hand. Bank transfers mean no cash to restock. I won’t bank funds now; I need physical cash for transactions.”

With many ATMs empty and banks rationing over-the-counter withdrawals, cash remains hard to come by, despite CBN claims.

“Eroded confidence may dissuade microbusinesses from banking cash crucial for transactions,” said Femi Egbesola, President of the Association of Small Business Owners of Nigeria. “This cash shortage couldn’t come at a worse festive time when transactions spike.”

The impacts look set to undermine recent drives towards financial inclusion and formalised banking, especially for rural small and microbusinesses that are still largely cash-dependent. Restoring trust and access to cash may prove challenging given current conditions.

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