Payment will range from a list of options such as cheques, wire transfers, debit and credit cards, online transactions and mobile banking. Using electronic banking as a platform, the cashless policy was introduced to further deepen the. Imperatives of advancing a cashless nigeria nigeria. Pdf impact of cashless economy in nigeria nii sackey. This makes the country to be heavily cash based economy. This paper dwelt on the meaning of a cashless system, explain information. Conceptual flow of cash based economy to cashless economy. In an attempt for nigeria to have sound economy as projected in vision 20. Pdf integrating cashless economic policy in nigeria. Appraisal of cashless policy on the nigerian financial system. Since the declaration of cashless economy policy by the central bank of nigeria, many scholars have written on this subject matter.
The central bank of nigeria introduced cashless policy initiative to accomplish two main macrosocio economic policy objectives of increased convenience and greater financial inclusion in nigeria. Cashless societies have existed from the time when human society came into existence, based on barter and. The use of emv chipcards is gaining momentum in kenya and other countries in eastern and central africa. In a digitized economy, payment made will be traceable. Effect of cashless policy on small and medium business in nigeria with abstract, chapter 15, references and questionnaire. Pdf impact of cashless economy in nigeria researchgate. An empirical analysis of the benefits of cashless economy on. The impact of the cashless policy on economic growth of nigeria.
Theoretical background cashless economy is not the complete absence of cash, it is an economic setting in which goods and services are bought and paid for through electronic media. Obi said that cashless transactions were viable and more secured mode of payment in any economy. A cash based economy is a setting where retail and commercial payments are primarily made in cash. To determine the characteristics of small and medium businesses in edo state. The new policy by central bank of nigeria cbn on cashless system of payment has raised a lot of concern to the growth of nigerian economy, with the objective of reducing robbery, high cost of. Using survey method, the study sampled 650 stakeholders respondents comprising businessmen, university students, and civil servants. Apr 21, the central bank of nigeria cbn has suspended its earlier directive on the implementation of cashless policy. Effect of cashless policy on small and medium business in. This study when completed will add to the body of knowledge in the area of banking and. Download this complete banking and finance project material titled. The importance, effect, causes, relationship, comparison, history, role, solutions are discussed. This study examines the implications of cashless banking, with a view to exposing the possible challenges and prospects it poses to the nigerian economy whilst employing aggregated approach. The statistical evidence provided by central bank of nigeria 2012 revealed that, cash related transactions accounted for 99% of customers activities in nigeria banks as at december, 2011. The policy claims that it will lead to increase tax collections among the selfemployed.
In nigeria as it is in many developing countries, cash is the main mode of payment. Cashless society cashless economy, online transactions. Jul 02, 2019 apr 21, the cbn in february announced its plan to extend the cashless policy to all the remaining states of the federation by oct. This study is poised to investigate and appraise to the best of the researchers ability the impact of the cashless economy policy on nigerian citizens and the economy at large. The impact of central bank of nigeria cashless policy in. To achieve this objective this study is the central bank of nigeria cbn has in. Preface why the central bank of nigeria made the cashless policy. An appraisal of cashless economy policy in development of. Nigerias aim to be among the biggest economy by 2020 has driven her to gradually move from a pure cash economy to a cashless policy. From the illustration above, odior and banuso 2012 argued that nigeria just left the real cash economy to cashless economy where there is still conglomeration of cash handling and electronic means in the economy and with time move to cashless economy where every transaction or most of the transactions in the economy will be done without.
To examine the effect of cashless policy on small and medium businesses in edo state. Central bank of nigeria cbn annual report and the nigerian interbank. What is a cashless economy a cashless economy is a system where all means of payments are carried out without the use of physical cash. Having recorded transactions, it clarification needed can help citizens to refine their budget more efficiently.
Greener journa l of internet, inf ormation and com munication sy stems vol. The quest for global relevance and sustainable development had. Large volumes prosperous for nigeria considering rapid economic ofcash need intense security and transportation is growth. Apr 21, the cbn in february announced its plan to extend the cashless policy to all the remaining states of the federation by oct. Nigerian financial system formidable and enhancing the overall economic performance of nigeria so as to place it on the right path in tune with global trends. It is in this regard that the central bank of nigeria cbn introduced the cashless policy with the objective of promoting. Nigerias cashless policy this case study features four large businesses that have derived clear benefits by early adoption of digital payments, including the nigerian bottling company contracted to cocacola, and the nigerian. Pdf this paper studied the impact of cashless policy in nigeria. Easily share your publications and get them in front of issuus. Since the gradual introduction of the cashless policy, stakeholders are divided along divergent views.
This study made use of secondary quarterly annual time series data which was gathered from the central bank of nigeria statistical bulletin and nigerian interbank settlement system nibss from 2009q42018q4. The managing directorceo of etranzact international limited, mr. This research is embarked upon to assess the pre and postimplementation period of nigerias clp with focus on the relationships between tools of clp and currency outside banks in the nigerian economy. In nigeria, cashless economy has been introduced with the pilot. Transaction volume atm withdrawals 109,592,646 cash withdrawals overthe 72,499,812 counter pos point of sale terminals 29,159,960 cheques 1,059,960 web 2,703,516 3. Little wonder why the central bank of nigeria recently introduced a. Cashless policy and economic activities in developing. The transformation of the financial sector of the nigerian economy has always occupied a cardinal position in the economic policies of all political administrations in nigeria. Effect of cashless policy on small and medium business in nigeria. Dec 02, 2016 in nigeria, another developing economy, the central bank has launched a cashless nigeria project whose objective is to reduce the usage of cash in transactions as far as possible. This study examines the relationship between electronic cashless policy and performance of nigeria economy. Effect of cashless policy on commercial banks profitability.
The new policy by central bank of nigeria cbn on cashless system of payment has raised a lot of concern to the growth of nigerian economy, with the objective. The impact of the cashless economy policy on nigerian. Effect of cashless policy on commercial banks profitability in nigeria. The cashless nigeria policy was heralded with the setting of cash withdrawal and lodgement limits the central bank of nigeria cbn introduced the policy with a pilot run in lagos implementation modalities of the cashless nigeria project the policy was meant to reduce the volume of physical cash transactions in the economy. Effect of cashless monetary policy on nigerian banking. Aug 28, 2016 the cbn and pro cashless policy activists have asserted reduction in crime rates, minimized risk associated with carrying huge sums of money, reduction in political corruption, reduction in banking cost, improvement on monetary policy in management of inflation and the overall growth and development of the economy of nigeria as advantages.
The nigerian financial system has always had a huge informal sector resulting in financial dualism with its attendant consequences including prevalence of cash transactions. Valentine obi, gave reasons why the central bank of nigeria cbn has embarked on initiatives aimed at migrating the nigerian economy from cash based to a cashless economy. Get free research paper on the impact of the cbn cashless policy on the development of the banking sector of nigeria project topics and materials in nigeria. Lecturer, faculty of law, usmanu danfodiyo university, sokoto nigeria. This is electronic information transmitted to a device which reveals the information about how much a person has stored in the bank and how much he. Cashless society cashless economy, online transactions, is. The response of large corporates and their value chains to government policies to shift to digital payments. However, the cost of cash to nigeria financial system is high and increasing.
Cashless nigeria is a policy established in the year 2012 by the central bank of nigeria to curb excesses in the handling of cash in the nigerian federation. In a cashless economy, little or very low cash flow is permitted. The first issue in the cashless economy is the issue of electronic purse. Central bank of nigeria the cashless nigeria project. Add an efficient electronic payments system to an economy, and you kick it into a higher gear. Relative rationale and impact of a cashless economy 2. In nigeria, another developing economy, the central bank has launched a cashless nigeria project whose objective is to reduce the usage of cash in transactions as far as possible. This study when completed will add to the body of knowledge in the area of banking and finance as literature on cashless policy in nigeria is scarce. Pdf electronic payment in cashless economy of nigeria. Analytically, this study employs descriptive statistical to highlightsoverview the effectiveness of the cashless policy of the cbn in nigeria.
Cashless payments facilitate the tracking of spending expenditure and record the movement of money. Cashless definition is not having or involving cash. Adoption of mobile banking in nigeria james adetunji odumeru lecturer, osun state college of technology, esa oke, nigeria abstract the central bank of nigeria recently introduced the cashless policy to reduce the volume of cash used for business transactions and thereby reduce cash handling costs by banks amongst other objectives. Jun, 2011 the managing directorceo of etranzact international limited, mr. A cashless economy is an environment in which money is spent without being physically carried from one person to the other. The main reason for the policy was to reduce the amount of. It is universally agreed that a safe and efficient national cashless system is essential for sound banking. Cashless economy and the nigerian banking system 3 the. The study shows that the cash policy is reduction in the costs of printing the period post the cashless policy has generally been and managing large sums of money.
For example, ejiofor and rasaki 2012 have noted that the cbn commenced the pilot scheme in lagos state apparently relying on its commercial stamina as nigerias business hub. Effects of cashless economy policy on financial inclusion. Cashless nigeria the central bank of nigeria cbn has introduced a new policy on cashbased transactions which stipulates a cash handling charge on daily cash withdrawals that exceed n500,000 for individuals and n3,000,000 for corporate bodies. A cashless society thrives on mobile phones, cloud computing, data analytics, encryption and storage, and near field communication technology dodgson, 2015, p.
Pdf evaluating nigeria cashless policy implementation. The relationship between electronic cashless policy and. To ensure an effective cashless economic policy, while the government has a herculean task in driving it to success through the provision of the much needed infrastructure requirement, the banks have an odious task of providing excellent services. The penetration of thousands of fintech startups into all spheres of financial services has now brought this revolution to the disruption of money itself. Issuu is a digital publishing platform that makes it simple to publish magazines, catalogs, newspapers, books, and more online. Nigerias shift from a cashbased economy to a cashless society. As part of our ambition to be one of the best 20 economies before the year 2020, cbn informed the world that nigeria would commence the process of changing to a cashless economy by january 2012. The impact of the cashless policy on economic growth of. Imperatives of advancing a cashless nigeria nigeria south.
Nigerias cashless policy better than cash alliance. Add bettercontrolled consumer and business credit, and you notch up economic velocity even further. A cashless society describes an economic state whereby financial transactions are not conducted with money in the form of physical banknotes or coins, but rather through the transfer of digital information usually an electronic representation of money between the transacting parties. The future of money 3 executive summary the growth of the digital economy has already disrupted industries as diverse as media, music and transportation. Given the policys objectives, the paper xrayed the associated benefits of the policy.
Since nigeria gained her independence in1960, there have been different constitutional reforms, change in economic and banking policies mainly aimed at stabilizing the economy, enhancing social welfare and. Pdf returns of the cashless policy in nigeria mpho. Introduction the study is about the recent cashless policy introduced by the central bank of nigeria to reduce cash content in daily transactions. Recently, the cbn came out with two laudable agenda the islamic banking noninterest banking and the cashless economy epayment systembabalola,2008. The impact of central bank of nigeria cashless policy in nigeria economy. An empirical analysis of the benefits of cashless economy. According to cbn, the new cash policy was introduced for a number of key reasons.
Effect of cashless policy on small and medium business in nigeria a case study of selected smes in edo state. As a way of fasttracking the nigerian economy so cashless economy. The policy was introduced by central bank of nigeria cbn in december 2011 and was. The paper examined the effect of cbns cashless policy on nigeria economy. Cashless economy, cyber fraud, ebanking, point of sales. Nigeria abstract the paper discussed the effects of cashless policy on the nigerian economy, how it was kickstarted in lagos, means of payments both manual and electronic, positive and negative effects of cashless policy, benefits to the economy and stakeholders, suggestions were made. Challenges of cashless policy implementation in nigeria 2. The central bank of nigeria introduced cashless policy initiative to accomplish two main macrosocioeconomic policy objectives of increased convenience and greater financial inclusion in nigeria. In view of the above, the central bank of nigeria cbn introduced the new policy on cashbased transactions which stipulates a cash handling charge on daily cash withdrawals that exceed n500,000 for individuals and n3,000,000 for corporate bodies.
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