The paper examined the effect of cbns cashless policy on nigeria economy. 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. Cashless economy and the nigerian banking system 3 the. Effect of cashless policy on small and medium business in. 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. Add bettercontrolled consumer and business credit, and you notch up economic velocity even further. 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. This paper dwelt on the meaning of a cashless system, explain information. 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. This makes the country to be heavily cash based economy. Cashless definition is not having or involving cash. The nigerian financial system has always had a huge informal sector resulting in financial dualism with its attendant consequences including prevalence of cash transactions. Pdf impact of cashless economy in nigeria researchgate. Pdf this paper studied the impact of cashless policy in nigeria.
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. Project topic and material on effect of cashless policy on commercial banks profitability in nigeria. 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. A cashless economy is an environment in which money is spent without being physically carried from one person to the other. 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. The relationship between electronic cashless policy and. 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.
Greener journa l of internet, inf ormation and com munication sy stems vol. It prescribed a cash handling charges on daily withdrawal above five hundred thousand naira n500,000. Issuu is a digital publishing platform that makes it simple to publish magazines, catalogs, newspapers, books, and more online. The impact of the cashless policy on economic growth of nigeria. The first issue in the cashless economy is the issue of electronic purse. Since the declaration of cashless economy policy by the central bank of nigeria, many scholars have written on this subject matter. Effect of cashless policy on small and medium business in nigeria with abstract, chapter 15, references and questionnaire. To achieve this objective this study is the central bank of nigeria cbn has in.
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. 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. However, the cost of cash to nigeria financial system is high and increasing. 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. 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. The importance, effect, causes, relationship, comparison, history, role, solutions are discussed. 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. Using survey method, the study sampled 650 stakeholders respondents comprising businessmen, university students, and civil servants. 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. The impact of central bank of nigeria cashless policy in. 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. Appraisal of cashless policy on the nigerian financial system. It is in this regard that the central bank of nigeria cbn introduced the cashless policy with the objective of promoting.
To examine the effect of cashless policy on small and medium businesses in edo state. Payment will range from a list of options such as cheques, wire transfers, debit and credit cards, online transactions and mobile banking. Large volumes prosperous for nigeria considering rapid economic ofcash need intense security and transportation is growth. This study when completed will add to the body of knowledge in the area of banking and. Conceptual flow of cash based economy to cashless economy. In a digitized economy, payment made will be traceable. The impact of the cashless policy on economic growth of. Relative rationale and impact of a cashless economy 2. Effect of cashless monetary policy on nigerian banking. 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. The impact of the cashless economy policy on nigerian. 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 future of money 3 executive summary the growth of the digital economy has already disrupted industries as diverse as media, music and transportation. In nigeria as it is in many developing countries, cash is the main mode of payment. 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. Add an efficient electronic payments system to an economy, and you kick it into a higher gear. An empirical analysis of the benefits of cashless economy on. To determine the characteristics of small and medium businesses in edo state. 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. The policy was introduced by central bank of nigeria cbn in december 2011 and was. Imperatives of advancing a cashless nigeria nigeria south. 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. Download this complete banking and finance project material titled. The main reason for the policy was to reduce the amount of. Pdf integrating cashless economic policy in nigeria.
A cashless society thrives on mobile phones, cloud computing, data analytics, encryption and storage, and near field communication technology dodgson, 2015, p. The penetration of thousands of fintech startups into all spheres of financial services has now brought this revolution to the disruption of money itself. 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. Easily share your publications and get them in front of issuus. 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. 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. Cashless payments facilitate the tracking of spending expenditure and record the movement of money. Nigerias shift from a cashbased economy to a cashless society. 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 impact of central bank of nigeria cashless policy in nigeria economy. The response of large corporates and their value chains to government policies to shift to digital payments. Since the gradual introduction of the cashless policy, stakeholders are divided along divergent views. Cashless society cashless economy, online transactions, is.
Central bank of nigeria the cashless nigeria project. Jun, 2011 the managing directorceo of etranzact international limited, mr. A cash based economy is a setting where retail and commercial payments are primarily made in cash. Effect of cashless policy on small and medium business in nigeria. 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. Apr 21, the cbn in february announced its plan to extend the cashless policy to all the remaining states of the federation by oct. 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. 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. Preface why the central bank of nigeria made the cashless policy. Pdf evaluating nigeria cashless policy implementation. It is universally agreed that a safe and efficient national cashless system is essential for sound banking.
Using electronic banking as a platform, the cashless policy was introduced to further deepen the. A cashless economy does not mean the absence of cash. The use of emv chipcards is gaining momentum in kenya and other countries in eastern and central africa. Introduction the study is about the recent cashless policy introduced by the central bank of nigeria to reduce cash content in daily transactions. Nigeria is primarily a cash economy but the cbns cashless policy on withdrawals and deposits in banks is aimed towards reducing the amount of physical each and encouraging more electronicbased transactions in payments for goods, services and fund transfers. Having recorded transactions, it clarification needed can help citizens to refine their budget more efficiently. To analyze the challenges that have hindered the adoption of cashless policy by small and medium businesses in edo state. An empirical analysis of the benefits of cashless economy. Apr 21, the central bank of nigeria cbn has suspended its earlier directive on the implementation of cashless policy. Cashless economy, cyber fraud, ebanking, point of sales. 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. 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. Recently, the cbn came out with two laudable agenda the islamic banking noninterest banking and the cashless economy epayment systembabalola,2008.
Cashless society cashless economy, online transactions. Obi said that cashless transactions were viable and more secured mode of payment in any economy. Imperatives of advancing a cashless nigeria nigeria. Effect of cashless policy on commercial banks profitability in nigeria. According to cbn, the new cash policy was introduced for a number of key reasons. This study examines the relationship between electronic cashless policy and performance of nigeria economy. Nigerias cashless policy better than cash alliance. A cashless society is a culture where no one uses cash. Cashless policy and economic activities in developing.
The quest for global relevance and sustainable development had. Central bank of nigeria cbn annual report and the nigerian interbank. 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. This is approved for students in accountancy, business, computer science, economics, engineering, arts. 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. Effects of cashless economy policy on financial inclusion. Analytically, this study employs descriptive statistical to highlightsoverview the effectiveness of the cashless policy of the cbn in nigeria. 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. As a way of fasttracking the nigerian economy so cashless economy. 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.
Lecturer, faculty of law, usmanu danfodiyo university, sokoto nigeria. The managing directorceo of etranzact international limited, mr. An appraisal of cashless economy policy in development of. Effect of cashless policy on commercial banks profitability. In nigeria, cashless economy has been introduced with the pilot. The policy claims that it will lead to increase tax collections among the selfemployed. 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. Cashless societies have existed from the time when human society came into existence, based on barter and. In an attempt for nigeria to have sound economy as projected in vision 20. 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. Challenges of cashless policy implementation in nigeria 2. Given the policys objectives, the paper xrayed the associated benefits of the policy.
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