The ease of conducting financial transactions is probably the biggest motivator to go digital. The impact of the cashless policy on economic growth of. The paper examined the effect of cbns cashless policy on nigeria economy. The impact of central bank of nigeria cashless policy in. Some of these policy measures came with tremendous success despite the initial skepticisms of nigerians. An exploratory study musa abdullahi bayero bayero university kano, gwarzo road kano, kano, nigeria abstract empirical studies about. Cashless policy has no significant impact on economic growth of nigeria hi. This article examined development and challenges of cashless policy in. In this connection, more studies focusing on africa in general and nigeria in particular are warranted. Cashless economy, on the other hand, is an economy where the physical cash circulating in the economy is minimized while other forms of payment especially electronic based payments are utilized. The effect of cashless policy of government on corruption in. Hence, any policy that promotes cashless payment will not affect the economy immediately. International journal of business and behavioral sciences vol.
This paper analyses critically to the very beginning, the introduction of cashless policy in banking business in nigeria. This study titled central bank of nigeria cashless policy and nigeria economy a study of cbn enugu intends to drive development and modernization our payment system in line with nigerias vision 2020. Cashless policy could often be affected by physical challenges such as high rate of illiteracy, inadequate sensitizationeducation of the benefits of cashless policy, and inadequate logistics such as the provision of internet connections in commercial areas, computers and point on sale pos machines. This paper dwelt on the meaning of a cashless system, explain information. The policy was introduced by the central bank of nigeria cbn in december 2011. The paper discussed the effects of cashless policy on the nigerian economy, how it was kick started in lagos, means of payments both. In nigeria as it is in many developing countries, cash is the main mode of payment. Cashless policy and contradictory fiscal policies punch. The banks were directed to put a hold on these charges until a directive is given by the cbn. Cashless policy has significant impact on the economic growth of nigeria. Nigeria s central bank cbn has clarified an early confusion surrounding the new charges on withdrawal and deposits for the countrys cashless policy.
Pdf this paper studied the impact of cashless policy in nigeria. The main reason for the policy was to reduce the amount of. The impact of the cashless economy policy on nigerian. Central bank of nigeria the cashless nigeria project. Effects of cashless economy policy on financial inclusion. This study examined cbn cashless policy by exploring its impact on the nigerian economy. Nigerias move to a cashless regime the central bank of nigeria cbn in 2012 commenced the implementation of the policy of the cashless nigeria project, which aims at reducing not eliminating the amount of physical cash in circulation in the economy, and encouraging more electronicbased transactions. 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 cashless policy has been introduced in nigeria, however, there are still excess of cash in the economy despite the cutting edge measures put in place by the nigerian interbank settlement system nibss aimed at removing andor reducing to the barest minimum all glitches associated with cashless and etransactions payment channels. Cashless economy is an economy where transaction can be done without necessarily carrying physical cash as a mean of exchange of transaction but rather with the use of credit or debit card payment for goods and services.
The central bank of nigeria cbn stated the following as key reasons why the cash policy was introduced. To what extent will the effective performance of business transactions be affected by the policy of cashless economy in nigeria. Section 5 and 6 highlights the expected benefits and the challenges facing the cashless policy in nigeria and section 7 discusses the policy implications of cashless banking in nigeria. This indicates that businesses and economic transactions cannot be underestimated. The effect of cashless policy of government on corruption. A cashless policy was recently initiated to curb corruption among other objectives. In an attempt for nigeria to have sound economy as projected in vision 20. This is known to have several negative implications for an economy, which is the reason why the central bank of nigeria 2011 introduced the cashless policy. Empirical studies about financial inclusion remain vital, especially in developing countries like nigeria, where little research studies have been conducted since the introduction of the cashless economy policy.
Pdf integrating cashless economic policy in nigeria. Full project the impact of the cashless policy on economic. This makes the country to be heavily cash based economy. C and raymond ezejiofor, 20, an appraisal of cashless economy policy in development of nigerian economy, research journal of finance and accounting, vol. Cashless economy and financial statement reporting in nigeria emengini, steve emeka ph. It is in this regard that the central bank of nigeria cbn introduced the cashless policy with the objective of promoting the use of electronic payment channels. However, the cost of cash to nigeria financial system is high and increasing.
Omotunde et al 20 posits that 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 endusers which can which can be aimed at reducing bank liquidity risks. Pdf impact of cashless economy in nigeria researchgate. Recall that the central bank of nigeria, cbn, recently began the implementation of the cashless policy, with the imposition of charges on cash deposits and withdrawals. Pdf on oct 1, 2016, ordu monday matthew and others published cashless economic policy in nigeria. Quarterly time series data from 2009 to 2016 was collected through the central bank. Effect of cashless monetary policy on nigerian banking. May 20 integrating cashless economic policy in nigeria. Cashless policy and economic activities in developing.
Preface why the central bank of nigeria made the cashless policy. The impact of central bank of nigeria cashless policy in nigeria economy. In recent years, nigeria has been experiencing a growth. A critical analysis of cashless banking policy in nigeria. 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. According to cbn, the new cash policy was introduced for a number of key reasons. Cbn discouraging cashless policy with new charges on. It is in this regard that the central bank of nigeria cbn introduced the cashless policy with the objective of promoting.
This study therefore assessed the perceptions of stakeholders on the types of corruption that can. Nigerias central bank cbn has clarified an early confusion surrounding the new charges on withdrawal and deposits for the countrys cashless policy. Corruption has been identified as a complex, endemic, and multilayered problem that threaten the very existence of nigeria and various efforts have been made by nigerian government to curb the menace. Given the policys objectives, the paper xrayed the associated benefits of the policy. The adoption of one type of cashless payment will affect another type of cashless payment in the short run. 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. It prescribed a cash handling charges on daily withdrawal above five hundred thousand naira n500,000.
There is no conclusive evidence on how the adoption of cashless payment might affect an economy. Since cashless policy is a recent economic policy with no previous data and more so, the study seek the opinion of the people by examining the impact analysis of the policy. The banks were directed to put a hold on these charges until. It is universally agreed that a safe and efficient national cashless system is essential for sound banking. Cashless payment might have a positive impact on economic activities hasan et al. Pdf returns of the cashless policy in nigeria mpho. The policy aims at reducing not eli minating the amount of physical. 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. Impact of cashless policy on business in nigeria one of the aims of the cashless policy is to work in line with nigerias vision 2020 goal of being among the top 20 economies of the year 2020. 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. The central bank of nigeria cbn cashless policy and the.
Bank of nigeria has reintroduced its cashless policy which stipulates a cash handling charge on daily cash withdrawals that exceed n500, 000. In addition, the policy aimed to reduce costs related to banking and facilitate the progression of monetary policy decisions and. A behaviourial change to economic growth cashless economies are those that use mostly plastic or digital money and thus minimal cash or money in paper form. 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. This study is to investigate the effects, challenges and prospects of cashless policy on the nigerian economy.
A cashless economy is a shift from cashbased transactions to electronicbased transactions. In 2015, the central bank of nigeria issued a notice to all banks that began collecting charges on withdrawals above the threshold in the remaining 30 states. Sep 19, 2019 this is because the central bank of nigeria has reintroduced its cashless policy which stipulates a cash handling charge on daily cash withdrawals that exceed n500, 000 for individuals and n3m for. The introduction of the cashless policy in march 2012 aimed to drive development and advance payment systems in nigeria. This is an economic system where all the business transactions in a particular country are performs with physical cash. The policy was introduced by central bank of nigeria cbn in december 2011 and was. Effects of cashless economy policy on financial inclusion in. It is in this regard that the central bank of nigeria cbn introduced the cashless policy with the objective of promoting the use of electronic payment channels instead of. The impact of cashless policy on the economic growth of nigeria, free undergraduate project topics, research materials, education project topics, economics project topics, computer science project topics, hire a data analyst. Since the declaration of cashless economy policy by the central bank of nigeria, many scholars have written on this subject matter. Sc department of banking and finance, university of nigeria nsukka abstract.
This policy seeks to turn a money economy to what can be regarded as a cashless economy. 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. 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. Specific objectives of the study is to examine the impact of the cashless policy on economic growth of nigeria. The cashless policy initiative of the central bank of nigeria is a move to i mprove the financial terrain of the economy. 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. Given the policy s objectives, the paper xrayed the associated benefits of the policy. 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 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. Table 1 shows the view of respond ents on benefits of cashless economy in nigeria.
The cashless system has become necessary to promote the use of electronic means of transaction towards making nigeria a cashless economy in the nearest future, where clumsy and expensiveto. 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 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. Little wonder why the central bank of nigeria recently introduced a. To what extent will the cashless economy affect the effectiveness of the financial statement reporting for economic development in nigeria. The impact of adopting cashless payment on economic growth can only be significantly observed in the long run. This paper empirically investigated the impact of cashless policy on nigeria economy. The policy was introduced by central bank of nigeria cbn in december 2011 and was kickstarted in lagos in january 2012.
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