Wednesday, 6 April 2016

An Appraisal of The Effect Of Cashless Policy On The Banking Industry In Implemented States


The Cashless policy in Nigeria is one of the many innovations introduced by Federal Republic of Nigeria, implemented by the Central Bank of Nigeria aimed at the growth and development of the economy. The role of cashless policy in an economy cannot be over-emphasized as it has a great impact on the sectors of the economy, one of which is the banking industry. This study appraises the effect of cashless banking, with a view to exposing the relationship level it poses to the Lagos state banking industry.

This study aimed at examining and investigating the respondents’ perception about acceptance level, effects on Lagos residents and its effect on banks after implementation. A single set of eighty (80) copies of questionnaire were administered to Bank staffs of commercial banks operating in Lagos metropolis. The methodology employed both inferential and descriptive statistical analysis. 

From findings, the researcher discovered that there is no significant relationship (.675) between the policy and its effect on acceptance level, while a significant relationship (.000) exist with respect to Lagos residents and its effect on Banks after its implementation respectively.

Therefore the study recommends that Lagos state residents should be sensitized more about the policy; and effective regulatory measures should be continuously implemented at the domestic and international level. In other words, legal, regulatory and economic policy frameworks should evolve to cope with these new cashless banking products.

Title page                                                                                          





Table of  Contents                                                                                      

CHAPTER ONE: Introduction

1.1     Background to the Study                                                                     

1.2     Statement  of  the Problem                                                        

1.3     Research Questions                                                                      

1.4     Objective of the Study                                                                

1.5     Justification of  the Study                                                                    

1.6     Hypotheses of  the Study                                                                     

1.7     Scope of  the Study                                                                   

1.8     Definition of  Terms                                                                     

1.9     Plan of  the Study            

CHAPTER TWO: Literature review

2.1     Conceptual Framework                                                             

2.2     Theoretical Background                                                                      

2.3     Empirical Evidence                                                                   

2.3.1  Benefits of cashless policy                                                      

2.3.2  Problems of cashless policy                                                    

CHAPTER THREE: Research methodology

3.1     Introduction                                                                                        

3.2     Research Design                                                                        

3.3     Population for the Study                                                                    

3.4     Sampling Techniques                                                                

3.5     Method of  data collection                                                         

3.6    Data analysis technique                 


4.1     Introduction                                                                                        

4.2     Respondents Profile                                                                   

4.3     Analysis of  Responses                                                              

4.3.1  The Acceptance level of cashless policy in Lagos state              

4.3.2  The effect of cashless policy on Lagos Residents                       

4.3.3  The effect of cashless policy on banks after implementation      

4.3.4  Analysis of  Model                                                                               

4.3.5  Regression hypothesis testing                                                    

4.4     Discussion of  Findings    


5.0     Introduction                                                                                        

5.1     Summary of  findings                                                                

5.2     Conclusion                                                                                

5.3     Recommendations                                                                               



CHAPTER ONE                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      


1.1 Background to the Study

Innovation has evolved today’s financial system which is a product of centuries. It started as a barter economy and has moved through various incarnations in response to limitations inherent in the evolving systems (Ajayi and Ojo, 2006). Changes will definitely continue to occur in response to social and technological advancements. 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. This has been a shift from the old cash handling system to cashless society, which is in vogue worldwide. To this end, the world has witnessed an upsurge ofelectronic payment instruments meant to facilitate trade and simplify payments.  
Before the introduction of electronic payment into Nigerian banking system, the armchair era existed with the features of customers walking into the banking hall to do transactions of all kind. They had to queue up and spend more hours to talk to a cashier to make their transactions. 

Inconveniences caused by these long queues discourage most customers and this made stakeholders such as bankers, Information technology (IT) experts, entrepreneurs and others to advocate for the replacement of physical cash and the introduction of more flexible, efficient and cost effective retail payment solutions (Baddeley, 2004). 

This called for making huge investments in technology to upgrade banks infrastructures in order to provide new electronic information based services. Such services as online retail banking are making it possible for individuals and corporate bodies to take advantage of new technologies at reasonable costs. 

 The nations quest of migrating from cash to cashless economy has been on the front burner. Analysts have posited that to meet the target of becoming one of the leading world economies by the year 2020, efforts must be made to embrace electronic payment system in its entirety. It was in this consciousness that the Central Bank of Nigeria (CBN), the apex regulatory body of the banking sector, came up with a reform policy to check the increasing dominance of cash in the banking sector in order to enhance e-payment system in the economic landscape.


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