study was intended to evaluate the impact of CBN cashless policy on the
Nigerian populace. This study was guided by the following objectives; to know
the advantages of the CBN cashless policy to the Nigerian populace, to know the
disadvantages of the CBN cashless policy to the Nigerian populace, to examine
the factors limiting the effective implementation of the CBN’s cashless policy.
study employed the descriptive and explanatory design; questionnaires in
addition to library research were applied in order to collect data. Primary and
secondary data sources were used and data was analyzed using the chi-square
statistical tool at 5% level of significance which was presented in frequency
tables and percentage. The respondents under the study were 100 respondents
from five banks in Lagos state. The study majorly focuses on the effect of
CBN’s cashless policy on the Nigerian populace.
study findings revealed that the CBN cashless policy has benefitted the
Nigerian populace; based on the findings from the study, efforts should be made
by the Nigerian government and stakeholders in sustaining the policy as this
would further benefit the Nigerian populace.
1.1 BACKGROUND TO THE STUDY
reactions have continued to trail the cashless policy introduced by the Central
Bank of Nigeria (CBN) in January 2012. The implementation of the policy
commenced in Lagos in 2012 but it was extended to the Federal Capital Territory
(FCT), Rivers, Kano, Ogun, Anambra and Abia states in July 2013. While some
die-hard cynics describe the policy as just another economic jargon that may
not be feasible, others say it will boost the country’s economic growth in line
with global best practices. The CBN cashless policy aims at reducing the amount
of physical cash in circulation; thereby encouraging more electronic-based
transactions in payment for goods and services (CBN, 2012).
cashless economy policy of the Central Bank of Nigeria (CBN) has come with both
pains and gains. As some are knocking it, others are hailing it.
policy, as enunciated by the CBN, entails “cash-based transactions and stipulates
a cash handling charge on daily cash withdrawals or cash deposits that exceed
N500,000 for individuals and N3,000,000 for corporate bodies’’ (CBN, 2012)The
former CBN Governor, MallamSanusiLamidoSanusi, explained that the cashless
economic policy was designed to promote financial intermediation and financial
inclusion, while minimizing revenue leakages and eliminating incidence of
robbery. It will also reduce the amount of cash payment and encourage
electronic payment (Berentsen, 1998). He further explained that the policy
became imperative because the cost of cash and associated risk of cash-driven
economy to Nigeria’s financial system was ever increasing.
policy on withdrawal allows individual customers to make a free cumulative
withdrawal of N500, 000 daily across the counter and ATM. Withdrawal above the
free limit will attract processing fee of three per cent for every N1, 000
above the limit. Many Nigerians considered this as not good enough as these
extra charges is seen as a means of extortion. However, many individual
costumers might need more than N500, 000 in day for one purpose or the other
because the citizens are already used to the system of going about with cash
and this has been considered as one of the pains of the cashless policy.
according to the statement by the CBN, corporate customers are allowed to make
free cumulative withdrawal of N3,000,000 daily. Withdrawal above the free limit
will attract a processing fee of five per cent for every N1,000 above the
limit.The policy on lodgment allows individual customers to make a free
cumulative lodgment of N500, 000 daily. Lodgment above the free limit will
attract processing fee of two per cent for every N1, 000 above the limit. Also,
corporate customers are allowed to make free cumulative lodgment of N3, 000,000
daily. Lodgment above the free limit will attract a processing fee of three per
cent for every N1,000 above the limit. This has been seen has stringent rules
in some quarters (Ajayi&Ojo, 2006).
apex financial institution in Nigeria has provided appropriate mechanism for
e-payment which has been deployed to facilitate the smooth running of the
cashless scheme. The listed mechanism includes Point of Sale (POS) Terminals,
Automated Teller Machine (ATM), Web, Mobile Phones, Internet Banking, among
others. Several Nigerian considered these mechanisms as not convenient and not
easy to operate because of the level of illiteracy among the Nigerian populace.
1.2 STATEMENT OF THE PROBLEM
several constraints that are there for everyone to see as to the effect of the
CBN cashless policy of the Nigerian populace, there are several benefits
accrued to its implementation. However, the legislative arm of government in
Nigeria conceded that even though the policy could save costs in the financial
sector, it did not, however, imply real sector growth. They noted that the
majority of retail and commercial payments were usually made in cash by a large
percentage of the population who did not operate bank accounts. They also noted
that the CBN had not achieved the needed 40 percent expansion of ATMs.
is also obvious that the financial infrastructure in Nigeria is grossly
inadequate to meet the demands of a cashless society. Besides, the people’s low
literacy level and the absence of constant power supply would discourage most
citizens from embracing the policy and Nigerians had been variously defrauded
of millions of naira through electronic transactions.
is also important to note that most communities in the country lacked banking
facilities that were designed to implement the policy. However, despite all the
advantages of the cashless policy including the fact that it will save cost of
printing currency notes, reduce theft and robbery etc. it is worth considering
if the CBN cashless policy is a pain or a gain which is the focus of this
1.3 OBJECTIVES OF THE STUDY
The following are the objectives of this study:
examine the advantages of the CBN’s cashless policy.
examine the disadvantages of the CBN’s cashless policy.
identify the factors limiting the effective implementation of the CBN’s
1.4 RESEARCH QUESTIONS
are the advantages of the CBN’s cashless policy to the Nigerian populace?
are the disadvantages of the CBN’s cashless policy to the Nigerian populace?
are the factors limiting the effective implementation of the CBN’s cashless
HO: The CBN’s cashless policy has no
benefit on the Nigerian populace.
HA: The CBN’s cashless policy has lots
of benefit on the Nigerian populace.
1.6 SIGNIFICANCE OF THE STUDY
The following are the significant of this study:
findings from this study will form a useful guide for the government of Nigeria
as they will have first hand information about the pains and the gains of the
CBN’s cashless policy on the Nigerian populace and make necessary reforms and
research will be a contribution to the body of literature in the area of the
effect of personality trait on student’s academic performance, thereby
constituting the empirical literature for future research in the subject area.