CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND TO THE STUDY
The recent innovation of technology for
financial transactions poses interesting questions for policy makers and financial
institutions regarding the suitability of current institutional arrangements
and availability of instruments to guarantee financial stability, efficiency,
effectiveness of monetary policy and achievement of sustainable economic growth
in Nigeria considering the perception of the populace (Ajayi and Ojo, 2006).
Over the course of history, different forms of payment systems have been in existence.
Initially, “trade by barter” was common. However, the problems of barter such
as the double coincidence of wants necessitated the introduction of various
forms of money. Nevertheless, pundits have been predicting the complete demise
of study instruments and the emergence of potentially superior substitute for
cash or monetary exchanges that is cashless society (Wikipedia 2011). Since
Nigeria‘s Independence in 1960, there have been different governments,
constitutional reforms, change in economic policies and banking reforms, mainly
directed at enhancing social welfare and achieving developmental goals but there
has been no substantial positive change in Nigeria‘s Human Development
Indicators.
Banks are the linchpin of the economy of any
country. They occupy central position in the country’s financial system and are
essential agents in the development process (Adewoye, 2013). By intermediating
between the surplus and deficit savings units within an economy, banks mobilize
and facilitate efficient allocation of national savings, thereby increasing the
quantum of investments and hence national output. In a developing economy such
as Nigeria, financial sector development has been accompanied by structural and
institutional changes and the sector generally has long been recognized to play
a crucial role in the economic development of the nation.
Monetary Policy is the regulation of the money
supply and interest rates by a Central Bank in order to control inflation and
stabilize currency. The Central Bank of Nigeria (CBN) undertakes monetary
policy in order to maintain Nigerian’s external reserve, safeguard the
international value of the legal currency, promote and maintain monetary
stability. Similarly, it acts as a sound and efficient financial system in
Nigeria, as a banker and financial adviser to the Federal Government and as
lender of last resort to the banks.
Consequently, in pursuance of its functions in
compliance with the core mandate, the CBN as a result of change which is a
constant factor, has engaged in series of reformations aimed at both making the
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. The
payments system plays a very crucial role in any economy, being the channel
through which financial resources flow from one segment of the economy to the
other. Therefore, it represents the major foundation of the modern market
economy. Essentially, there are three pivot al roles for the payments system
namely; the Monetary Policy role, the financial stability role and the overall
economic role (CBN, 2011).
1.2 STATEMENT OF THE PROBLEM
Most Less Developed Countries like Nigeria
are on the transition from a pure cash economy to cashless one for
developmental purposes. To reduce the cost of banking services (including cost
of credit) and drive financial inclusion by providing more efficient
transaction options and greater reach and to improve the effectiveness of
monetary policy in managing inflation and driving Nigerian economic growth
(CBN,2013). In addition, the cashless policy aims to curb some of the negative consequences
associated with the high usage of physical cash in the economy, including: high
cost of cash: high risk of using cash, high subsidy, informal economy and
inefficiency & corruption (CBN, 2011).
Customers demand efficient, fast and
convenient services. Customers want a Bank that will offer them services that
will meet their particular needs (personalized Banking) and support their
Business goals for instance; businessmen
want to travel without carryout cash for security reasons. They want to be able
to check their balance online, find out if a cheque is cleared, transfer funds
among accounts and even pay their bills online. However, this study is
examining the perception of Bank customers on the CBN’s cashless policy in
Nigeria.
1.3 OBJECTIVES OF THE STUDY
The
following are the objectives of this study:
1. To
examine the
perception of Bank customers on the CBN’s cashless policy in Nigeria.
2. To examine the perception of bank customer
on the reliability and effectiveness of the CBN’s cashless policy in Nigeria.
3. To determine the advantages and
disadvantages of the CBN’s cashless policy in Nigeria.
1.4 RESEARCH QUESTIONS
1. What
is the
perception of Bank customers on the CBN’s cashless policy in Nigeria?
2. What is the perception of bank customer on
the reliability and effectiveness of the CBN’s cashless policy in Nigeria?
3. What are the advantages and disadvantages
of the CBN’s cashless policy in Nigeria?
1.6 SIGNIFICANCE OF THE STUDY
The
following are the significance of this study:
1. Results
of this study will educate the general public on the perception of bank
customer on the CBN’s
cashless policy in Nigeria.
2. This research will also serve as a
resource base to other scholars and researchers interested in carrying out
further research in this field subsequently, if applied will go to an extent to
provide new explanation to the topic
1.7 SCOPE/LIMITATIONS OF THE STUDY
This study will cover the attitude, views and
opinion of bank customers on the effectiveness and general implementation of
the CBN’s
cashless policy in Nigeria.
LIMITATION OF STUDY
Financial constraint- Insufficient fund tends to impede the
efficiency of the researcher in sourcing for the relevant materials, literature
or information and in the process of data collection (internet, questionnaire
and interview).
Time constraint- The researcher will simultaneously engage in this
study with other academic work. This consequently will cut down on the time
devoted for the research work.
REFERENCES
Adewoye
J.O. (2013). Impact of mobile banking on service delivery in the Nigerian commercial banks. Int. Rev.
Manage. Bus. Res. 2(2):333-344.
Ajayi
S.I. & Ojo O.O. (2006).Money and banking: Analysis and policy in the
Nigeriancontext. Ibadan Daily Graphics.
Central Bank of
Nigeria (2011). “Further Clarification on Cashless Lagos Project” Retrieved
from http://www.cenbank.org/cashless
Central Bank of Nigeria (2003). Guidelines on Electronic Banking
in Nigeria. August.