The Impact Of Cashless Policy On Economic Growth Of Nigeria

The Impact Of Cashless Policy On Economic Growth Of Nigeria

Chapter One

Preface

Background Of The Study

The preface of electronic banking, online deals and mobile banking in Nigeria has paved way for a new period of development where the use and demand for physical cash is gradationally declining. These recent elaboration of technology in the Nigerian fiscal institutions posses intriguing questions for economist, fiscal institutions, business critic and the government regarding the current provident status, logistics, and vacuity of instruments to guarantee profitable growth and stability, effectiveness and effectiveness of the cashless policy.

Since the commencement of humanity, colorful payment styles have been used to buy goods and services starting with the trade by trade. The trade by trade system of sale has been the foundation for the preface of plutocrat and coins to break the problem of double coexistence of wants and divisibility faced by trade by trade. The use of plutocrat/ coins was introduced after the use of trade by trade system, and it has answered colorful challenges associated with trade by trade, but the use of plutocrat as an exchange medium has its own challenges and dis- advantages and can still be replaced with a better payment system the cashless policy/ banking.

colorful advantages enjoyed by further advanced nations similar as the US has urged the Central Bank of Nigeria( CBN) to borrow the cashless policy. At the end of the 1980s the use of cash for copping consumption goods in the US has constantly dropped with affectation( Humphrey, 2004). Nigeria†™ s end to be among the biggest frugality by 2020 has driven her to gradationally move from a pure cash frugality to a cashless policy. Since Nigeria gained her independence in1960, there have been different indigenous reforms, change in profitable and banking programs substantially aimed at stabilizing the frugality, enhancing social weal and enhancing profitable growth and development.

In view of being one of the stylish and biggest husbandry in 2020, the CBN has started enforcing the cashless policy/ banking in some major countries metropolises in Nigeria similar as Lagos, Kano, Port- Harcourt and Onitsha. The CBN and Pro cashless policy activists have asserted reduction in crime rates, minimized threat associated with carrying huge totalities of plutocrat, reduction in political corruption, reduction in banking cost, enhancement on financial policy in operation of affectation and the overall growth and development of the frugality of Nigeria as advantages associated with the perpetration of the cashless policy.

Statement Of The Problem

Monetary policy as a fashion of profitable operation to bring about sustainable profitable growth and development through cashless policy and banking introduced by the Central bank of Nigeria( CBN) isn’t completely functional due to high rate of ignorance, in-acceptable sensitization/ education of the benefits of the cashless policy, and in-acceptable logistics( similar as the provision of internet connections in marketable areas, computers and Point on trade( POS) machines).

piecemeal from the physical challenges, profitable data and pointers aren’t completely available and dependable. There’s a great challenge in trying to dissect the true impact of the cashless policy on the frugality of Nigeria as only many financial and macroeconomic pointers can be traced with relation to the subject matter. Several scholars have tried to dissect the cashless system ore-banking. still, it becomes clear that many studies present a comprehensive evaluation ofcash-less banking counteraccusations in developing countries. utmost ignore its profitable benefits of the equation while some do deficient examination of its negative counteraccusations . This is frequently due to unreliable panel data for financial and macroeconomic pointers. Although, this study focuses on Nigeria, it’s delicate to restate cashless studies from one country to another. Indeed payments instruments that look analogous across countries on the face may be different due to literal and legal variations( Daniel et al, 2004).

Objects Of The Study

The main ideal of the study is to examine the impact of the cashless policy on the frugality of Nigeria and how it affects profitable growth. Specific objects of the study include

To examine the impact of the cashless policy on profitable growth of Nigeria.

To examine the colorful challenges associated with the perpetration of the cashless policy/ banking.

To proffer suggestions on how cashless policy and other financial programs can be managed for better donation to the profitable growth and development of Nigeria.

Exploration Thesis

1. Ho Cashless policy has no significant impact on the reduction of affectation in Nigeria

Hi Cashless policy has significant impact on the reduction of affectation in Nigeria.

2. Ho Cashless policy has no significant impact on profitable growth of Nigeria

Hi Cashless policy has significant impact on the profitable growth of Nigeria.

Significance Of The Study

The study will give colorful perceptivity into the colorful counteraccusations the preface of the cashless policy will have on the frugality of Nigeria. Through examining colorful profitable pointers similar as the gross domestic product( GDP) and affectation, the study will examine and compare growth trends and changes to determine whether the cashless policy introduced by the CBN has a negative or positive effect on the frugality of Nigeria.

colorful challenges and prospects linked in the study will also enable colorful stakeholders to attack these challenges effectively by making programs that will address them and boost the frugality of Nigeria.

Compass Of The Study

In performance of the ideal of the study; attention shall be concentrated on electronic banking among other electronic commerce perpetration. In order to conduct an empirical disquisition into the relinquishment of Electronic banking in Nigeria and will also examine the nature of electronic banking operations from the CBN bulletin from2010- 2012.

Description Of Terms

Access Products †“ Products that allow consumers to pierce traditional payment instrument electronically, generally from remote locales.

ATM Card †“ An ATM card( also known as a bank card, customer card, crucial card, or cash card) is a payment card handed by a fiscal institution to its guests which enables the client to use an automated teller machine( ATM) for deals similar as deposits, cash recessions, carrying account information, and other types of banking deals, frequently through interbank networks.

CBN- Central Bank of Nigeria.

Chip Card †“ Also known as an intertwined circuit( IC) Card. A card containing one or further computers chips or integrated circuits for identification, data storehouse or special purpose processing used to validate particular identification figures, authorize purchases, corroborate account balances and store particular records.

Electronic Data Interchange( EDI) †“ The transfer of information between associations in machine readable form.

Electronic plutocrat †“ Monetary value measured in currency units stored in electronic form on an electronic device in the consumer†™ s possession. This electronic value can be bought and held on the device until reduced through purchase or transfer.

Internet Banking- This is a product that enables the Bank influence on the Internet

Banking System Module in- erected on the new Banking operation( BANKS) enforced by the Bank to serve the Internet Banking needs of the Bank†™ s guests.

Mobile Banking- This is a product that offers guests of a Bank to pierce services as you go. client can make their deals anywhere similar as account balance, sale enquiries, stop checks, and other customer†™ s service instructions, Balance Inquiry, Account Verification, Bill Payment, Electronic fund transfer, Account Balances, updates and history, client service via mobile, Transfer between accountsetc.

Payment System †“ A fiscal system that establishes that means for transferring plutocrat between suppliers and of fund, generally by swapping disbenefits or Credits between fiscal institutions.

Point Of trade( POS) Machine- A Point- of- trade machine is the payment device that allows credit/ disbenefit cardholders make payments at deals purchase outlets. It allowed guests to perform the following services Retail Payments, Cashless Payments, Cash Back Balance Inquiry, Airtime Vending, fidelity Redemption, Printing mini statementetc.

Smart Card †“ A Card with a computer chip bedded, on which fiscal health, educational, and security information can be stored and reused.

Transaction Alert- Our guests carry out disbenefit/ credit deals on their accounts and the need to keep track of these deals urged the creation of the alert system by the Bank to notify guests of those deals. The alert system also serves as announcement system to reach out to guests when necessary information need to be communicated.

Western Union Money Transfer( WUMT)- Western union plutocrat transfer is a product that allowed people with cousins in Diaspora who may be remitting plutocrat home for family up- upkeep, Project backing, School freights etc. Nigerian Communities known for having their siblings gainfully employed in other corridor of the world are idle requests for Western Union Money Transfer.

References

Daniel,D.G.,R.W. Swartz, andA.L. Fermar,( 2004) †• Economics of a Cashless Society An Analysis of Costs and Benefits of Payment Instruments†–, AEI- Brookings Joint Center

Humphrey,D.B.( 2004) †• relief of cash by cards inU.S. Consumer Payments, Journal of Economics and Business, 56, 211†“ 225.

Humphrey,D.B. andA.N. Berger( 1990) †• request Failure and Resource Use Economic impulses to Use Different Payment Instruments†–., New York, Monograph Series in Finance and Economics.