Effect of cashless law enforcement in nigeria

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Volume. 1 (2), pp. 040-043, April 2013.

Research Content

Impact of Cashless Economic climate in Nigeria

*Omotunde Muyiwa1, Sunday Tunmibi, you and John-Dewole A. Capital t. 2


Institution of Computer system Science, Mathematics and I . t, Houdegbe United states University, Republic of Benin.

a couple of

Department of Computer Science with Electronics, Faculty of Information Technology and Systems Lead City University, Ibadan. Nigeria.

*Corresponding Author’s email: [emailprotected]


This paper studied the impact of cashless policy in Nigeria. The policy was introduced simply by Central Bank of Nigeria (CBN) in December 2011 and was kick-started in Lagos in January 2012.

Survey exploration was implemented with questionnaire as data collection device. Responses through the respondents present that cashless policy raises employment; decrease cash related robbery thereby reducing risk of carrying money; cashless policy will also lessen cash related corruption and attract more foreign buyers to the nation. The study, therefore , shows that the development of cashless economic climate in Nigeria can be seen as being a step in the proper direction. That isexpected that its effects will be experienced in modernization of Nigeria payment system, decrease in the cost of bank services, reduction in high safety and security risks and also curb financial related corruptions.

Keywords: Cashless economy, Cashless policy, Lagos State, Nigeria.


Cashless economic system is a great economy in which transaction can be done without actually carrying physical cash as a means of exchange of purchase but rather with the use of credit or debit card repayment for services and goods. The cashless economy policy initiative in the Central Traditional bank of Nigeria (CBN) is actually a move to enhance the financial landscape but in the long run sustainability in the policy might be a function of endorsement and compliance by end-users (Ejiro, 2012). The CBN cash policy stipulates a daily cumulative limit of N150, 1000 and N1, 000, 1000 on cost-free cash withdrawals and lodgments by individual and corporate clients respectively in the Lagos Express with effect from Mar 30, 2012.

Individuals and corporate organizations that make cash deals above the limitations will be recharged a service charge for portions above the total limits. Furthermore, 3rd party cheques above N150, 000 shall not be eligible for encashment over the counter with effect coming from January you, 2012. Benefit for this sort of cheques shall be received through the clearing home. All Nigerian banks were expected to stop cash in flow lodgment companies rendered to merchant-customers by January one particular, 2012.

The policy throughout the advanced make use of information technology makes it possible for fund copy, thereby minimizing time lost in Bank(s). Wizzit, an easy growing mobile phone banking firm in South Africa has over three hundred thousands of customers across South Africa. Likewise, M-PESA was introduced in Kenya as being a small worth electronic system that is attainable from regular mobile phones. They have experienced exceptional growth as its introduction by mobile phone operator (Safaricom) in Kenya in March, 2007 and had been adopted by nine , 000, 000 customers, which can be about 40% of Kenya’s adult human population. Wizzit and also other mobile finance including MPESA in Kenya are supporting low salary Africans produce financial purchase across longdistance with their mobile phones, thereby reducing their travel cost and eliminating the hazards of carrying cash and in addition avoiding the majority of banking expenses (Akintaro, 2012).

It is assumed that the proper execution of mobiles and other technology can aid the implementation of cashless coverage and hence, the growth of cashless economy in Nigeria. The development of the execution of cashless policy (policy is plan of activities adopted by simply government) commenced in Lagos State, Nigeria. Why Lagos? According to Central Lender of Nigeria (CBN, 2011) Lagos condition accounted for 85% of DETRÁS and 66% of cheques transaction in Nigeria. Cashless economy is aimed at reducing the number of physical cash circulating inside the Nigeria economic climate and thereby encouraging even more electronic”based transaction. According to Central Financial institution of Nigeria (CBN, 2011) the policy is expected to reduce price incurred in maintaining cash-based economy by 90% upon the full implementation in Nigeria. This research aims to look at the impact of cashless economic climate in Nigeria.



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Cashless economic climate is not the complete a shortage of cash, costly economic setting in which goods and services are bought and purchased through digital media. In respect to Woodford (2003), Cashless economy is defined as one in which there are thought to be not any transactions bruit that can be lowered through the use of cash balances, and that accordingly give a reason for possessing such balances even when they earn price of go back. In a cashless economy, what kind of money in your pocket is virtually irrelevant. You can pay for your purchases simply by any one of a plethora of credit cards or bank copy (Roth, 2010).

(2004) discovered that designed countries worldwide, to a large extent, are getting off paper repayment instruments toward electronic types, especially payment cards. A lot of aspects of the functioning with the cashless economic climate are improved by e-finance, e-money, e-brokering and e-exchanges. These all label how ventures and payments are effected in a cashless economy (Moses-Ashike, 2011). Marco and Bandiera (2004) believe increased using cashless bank instruments strengthens monetary plan effectiveness and the current level of e-money use does not create a risk to the balance of the economic climate. However , it will conclude that central banks can easily lose control of monetary insurance plan if the govt does not any responsible financial policy.

Echekoba and Ezu (2012), within a research accomplished in Nigeria, observed that 68. 2% of the surveys takers complained about long lines in the traditional bank, 28. 9% complained of bad frame of mind of teller officers (cashiers) while installment payments on your 89% lamented of lengthy distance of bank spots to their home or job places. Furthermore, in her 24th NCS national meeting in Dec 2011, CBN data demonstrates 51% of withdrawal required for Nigeria was through automatic teller machine (ATM), while 33. 6% was through over the counter (OTC) cash withdrawals and 13. 6% through Cheques. Payment was likewise done through point of sales equipment (POS) which will accounted for 0. 5% and web 1 . 3%. Therefore , if the advantages of CREDIT in Nigeria cash withdrawals system reduced OTC drawback; then it can implies that introduction of cashless policy maintained application of i . t can achieve more to reduce more than dependent on cash payment in Nigeria economic system system.

Yet , Akhalumeh and Ohioka (2011) observed a few challenges while using introduction of cashless insurance plan. Their studies show that 34. 0% of the respondents cited problem of internet fraud, 15. five per cent cited issue of limited POS/ATM, 19. 6% reported problem of illiteracy and 30. 9% stayed neutral ” the respondent not really been sure of problem been expected or experienced. Although in some quarters there was anxiety about unemployment, several believe it can create even more jobs particularly when companies making POS machine are cited in Nigeria. More so, data sourced via Central Bank of Nigeria portal shows that Lagos condition, with a inhabitants of 18 million people, only offers sixty onePoint Of Revenue, twenty bank branches and twenty four ATMs per 90, 000 persons which are far less to satisfy the needs in the population. These types of data check the claim of Echekoba and Ezu (2012) on the trouble of cash centered economy and cashless insurance plan in Nigeria. For powerful cashless implementation in Nigeria availability of adequate and well-functioning infrastructure (notably electricity), harmonization of money and budgetary policy, regular assessment with the performance of cashless bank channels, account of the present state and structure of the economy, upgrade of monetary policy platform and increased efforts towards economic progress whilst handling inflation should be considered (Odior and Banuso, 2012). 3. RESEARCH METHODOLOGY

This study was carried out, applying accidental sample method, in Lagos point out, Nigeria. A total of 500 traders, college students and detrimental servants had been sampled. Set of questions was used since data collection instrument, with questions upon demographics and benefits of cashless economy in Nigeria. Difficulties statistical technique used was descriptive (use of frequency desks and charts).


5. 1 Demographics

replies on sexuality show that male participants accounted for fifty five. 6% even though the female respondents are 44. 4%. Number 1 and Figure two presents the responses about age and occupation, respectively. For age group, majority of the respondents happen to be between 18 to more than 20 years, this is and then those between 26 to 40 years while the least amount are among 41 to 60 years. Intended for occupation of the respondents, the highest percentage (44. 4%) is definitely traders, and then students (33. 3%) and civil maids (22. 2%).



Vol. 1 (2), pp. 040-043, April 2013.

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41-60 years


18-25 years


26-40 years


Determine 1: Regarding Respondents

forty five








your five




Municipal servants

Figure 2: Job of Respondents

4. 2 Rewards

Table 1 shows the view of respondents about benefits of cashless economy in Nigeria. The minimum percentage, 14. 1% from the respondents, thought that cashless policy increases employment. A better percentage, 22. 2% of the respondents, believed that cashless policy in Nigeria will certainly reduce cashrelated robbery therefore reducing risk of carrying cash. The highest percentage of the participants believed that cashless insurance plan will lessen cash related corruption (33. 3%) and cashless policy will attract even more foreign investors to the region (33. 3%). Table one particular: Benefits of Cashless Economy in Nigeria

Benefits of Cashless Economy

Enhance employment

Reduce funds related thievery

Reduce cash related corruption

Attract even more foreign investment


Percentage (%)

11. 1%

22. 2%

thirty-three. 3%

33. 3%



forty two

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Vol. you (2), pp. 040-043, April 2013.


The study, effect of cashless economy in Nigeria, focused on the three significant categories with which Nigerians can be divided ” traders, learners and civil servants. More number of traders was sampled, compared to learners and city servants, because they are more in business and financial ventures. More so, a greater number of participants within the age group of 18 and twenty-five years show that apart from learners, quite a number of Nigerian youth arealso into trade.

This study shows that the creation of cashless economy in Nigeria can be seen as being a step in the best direction. It can be expected that its impact will be sensed in modernization of Nigeria payment system, lowering of the cost of bank services and also reduction in excessive security and safety dangers. This should have curbing financial related corruptions and cultivating transparency.

Also, it is assumed the fact that introduction of cashless plan in Nigeria will help to reduce the amount of bills and notes moving in the economy. This would, therefore , lessen handling operation cost incurred on regular money, and also reduction in cash related criminal offenses. It should likewise help to offer easy access to banking providers for Nigerians.


Akhalumeh, L. B., and Ohiokha, Farreneheit. (2011): Nigeria’s Cashless Economic system; The Imperatives. International Log of Supervision & Business Studies. vol. 2 pp. 12 ” 17.

Akintaro, S. (2012): Going Cashless. IT & Telecom break down, online journal, august, 2012 CENTRAL BANK OF NIGERIA (2011): To a Cashless Nigeria: Equipment & Tactics. Nigerian Journal of Economy. 3(2), 344 ” three hundred and fifty.

Echekoba, Farrenheit. N., and Ezu, G. K. (2012): Electronic Full Payment Systems: User Acceptability & Payment Problems in Nigeria. Arabian Journal of Business & Management Assessment. vol. a few, pp. 60 ” 63. Ejiro, To. (2012): What Nigerians Imagine the Cashless Economy Plan. Nigerian Log of Overall economy. 4(6), 97 ” 102.

Humphrey, M. B. (2004): •Replacement of money by playing cards in U. S. Consumer Payments, Journal of Economics and Organization, 56, 211″225.

Marco, A. and L. Bandiera (2004): -Monetary Policy, Budgetary Areas and Financial Creation with Electric Money, IMF Working Research, IMF.

Moses-Ashike, They would. (2011), “Cashless Economic can Reduce Likelihood of Carrying Large Cash, [Online] Available: http://www.businessdayonline.com/¦/22217.

Odior, E. H., and Banuso, F. N. (2012): Cashless Banking in Nigeria: Challenges, Benefits & Policy Effects. European Scientific Journal. Vol 8, pp. 12 ” 16.

Roth, W. L. (2010). “The Future of Money: The Cashless Economic climate ” Component 1. [Online] Available: https://www.x.com/¦/future-money-cashless-economy”part-i. Woodford M. (2003). “Interest & Value: Foundation of a Theory of Monetary Policy, Princeton School Press.




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