Impact of Cashless Economy in Nigeria

Muyiwa Omotunde,Tunmibi Sunday,A.T John-Dewole

doi:10.15580/gjiics.2013.2.020713436

Muyiwa Omotunde, Tunmibi Sunday + Show 1 more

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https://doi.org/10.15580/gjiics.2013.2.020713436

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Abstract

This paper studied the impact of cashless policy in Nigeria. The policy was introduced by Central Bank of Nigeria (CBN) in December 2011 and was kick-started in Lagos in January 2012. Survey research was adopted with questionnaire as data collection instrument. Responses from the respondents show that cashless policy will increase employment; reduce cash related robbery thereby reducing risk of carrying cash; cashless policy will also reduce cash related corruption and attract more foreign investors to the country. The study, therefore, shows that the introduction of cashless economy in Nigeria can be seen as a step in the right direction. It is expected that its impact will be felt in modernization of Nigeria payment system, reduction in the cost of banking services, reduction in high security and safety risks and also curb banking related corruptions.

Highlights

Cashless economy is an economy where transaction can be done without necessarily carrying physical cash as a means of exchange of transaction but rather with the use of credit or debit card payment for goods and services
The cashless economy policy initiative of the Central Bank of Nigeria (CBN) is a move to improve the financial terrain but in the long run sustainability of the policy will be a function of endorsement and compliance by end-users (Ejiro, 2012)
In her 24th NCS national conference in December 2011, CBN data shows that 51% of withdrawal done in Nigeria was through automated teller machine (ATM), while 33.6% was through over the counter (OTC) cash withdrawals and 13.6% through Cheques

Summary

INTRODUCTION

Cashless economy is an economy where transaction can be done without necessarily carrying physical cash as a means of exchange of transaction but rather with the use of credit or debit card payment for goods and services. The CBN cash policy stipulates a daily cumulative limit of N150, 000 and N1, 000,000 on free cash withdrawals and lodgments by individual and corporate customers respectively in the Lagos State with effect from March 30, 2012. Wizzit and other mobile financial services including MPESA in Kenya are helping low income Africans make financial transaction across long distance with their cellphones, thereby reducing their travel cost and eliminating the risks of carrying cash and avoiding most banking charges (Akintaro, 2012). According to Central Bank of Nigeria (CBN, 2011) Lagos state accounted for 85% of POS and 66% of cheques transaction in Nigeria. According to Central Bank of Nigeria (CBN, 2011) the policy is expected to reduce cost incurred in maintaining cash-based economy by 90% upon its full implementation in Nigeria. This study aims to look at the impact of cashless economy in Nigeria

BRIEF LITERATURE REVIEW

RESEARCH METHODOLOGY

RESULT

Benefits

Findings

CONCLUSION