The cbn and pro cashless policy activists have asserted reduction in crime rates, minimized risk associated with carrying huge sums of money, reduction in political corruption, reduction in banking cost, improvement on monetary policy in management of inflation and the overall growth and development of the economy of nigeria as advantages. Sc department of banking and finance, university of nigeria nsukka abstract. The first issue in the cashless economy is the issue of electronic purse. Since the gradual introduction of the cashless policy, stakeholders are divided along divergent views. Aug 28, 2016 the impact of the cashless policy on economic growth of nigeria. Using survey method, the study sampled 650 stakeholders respondents comprising businessmen, university students, and civil servants. But, despite progress, there are obstacles that need to be overcome before we can say goodbye to coins. Nov 07, 2017 a year after note ban, cashless economy is still a distant dream the number and value of cashless transactions, understandably, shot up right after the note ban, and has now come down to predemonetisation levels. This means even though sensitization in a cashless economy, transactions are. Benefits of cashless economy reduced instances of tax avoidance because it is financial institutions based economy where transaction trails are left. Since the declaration of cashless economy policy by the central bank of nigeria, many scholars have written on this subject matter. Central bank of nigeria legislated a policy intended to simultaneously lessen the. The effect of cashless policy of government on corruption.
Cashless policy and economic activities in developing. Money is impersonal and reduces qualitative values to. Dec, 2016 cashless economy leads to digitization which is tech savvy and time saving. First, the relationship between cashless economy and financial inclusion were explored in a low income country setting kano, nigeria. From midnight of 8 november 2016, 500 inr and 1,000 inr notes ceased to be considered as legal tender. The impact of the cashless policy on economic growth of. Cash can also refer to cheques, money orders, cashiers cheques, bank drafts, or travellers cheques.
Pdf the introduction of the cashless policy in march 2012 aimed to drive development and advance payment systems. The impact of the cashless economy policy on nigerian. Nigerias move to a cashless regime the central bank of nigeria cbn in 2012 commenced the implementation of the policy of the cashless nigeria project, which aims at reducing not eliminating the amount of physical cash in circulation in the economy, and. Add bettercontrolled consumer and business credit, and you notch up economic velocity even further. Cashless economy will reduce the production of paper currency and coins. The cost of printing currency notes and minting of coins can also be. Enhance the central bank of nigeria cbn new policy on cashless economy. Effects of cashless economy policy on financial inclusion in. D department of accountancy, university of nigeria nsukka. A cash based economy is a setting where retail and commercial payments are primarily made in cash. The main reason for the policy was to reduce the amount of. Cashless economy pros and cons of cashless society in india. Nigeria is primarily a cash economy but the cbns cashless policy on withdrawals and deposits in banks is aimed towards reducing the amount of physical each and encouraging more electronicbased transactions in payments for goods, services and fund transfers.
Nigerias shift from a cashbased economy to a cashless society. Cashless economy leads to digitization which is tech savvy and time saving. Moneyless man reveals how to live a cashless life without. And critics question whether the policy platform perhaps goes too far into the details especially around devices and pricing.
Noordin n, zakaria z, mohamed sawal mzh 2012, bankruptcy among young executives in malaysia, international conference of economic marketing. A cashless society describes an economic state whereby financial transactions are not. Introduction cash usually refers to money in the form of currency, such as banknotes or coins. The effect of cashless policy, saving and bank credit on nigerian deregulated economy suberu o. Nothing is guaranteed, but it is important to note that in india, the government has already rolled out a biometric system to prevent welfare fraud. Effect of cashless monetary policy on nigerian banking. The countries that would profit most from a cashless world. Little wonder why the central bank of nigeria recently introduced a. According to cbn, the new cash policy was introduced for a number of key reasons. Woodford found inspiration in wicksells interest and prices to build his new monetary treatise. Theoretical background cashless economy is not the complete absence of cash, it is an economic setting in which goods and services are bought and paid for through electronic media. However, the cost of cash to nigeria financial system is high and increasing.
A year after note ban, cashless economy is still a distant dream. This article examined development and challenges of cashless policy in. A lot of data transfer happens due to the cashless transaction. This makes the country to be heavily cash based economy. Or a cashless economy is one in which the purchase of goods and services and the payment of debts and remittances are done through electronic. Second, for the first time variables of cashless economy were tested on financial inclusion among working age adults in kano, nigeria. A year after note ban, cashless economy is still a distant. In a cashless economy, transactions are settled using. From the illustration above, odior and banuso 2012 argued that nigeria just left the real cash economy to cashless economy where there is still conglomeration of cash handling and electronic means in the economy and with time move to cashless economy where every transaction or most of the transactions in the economy will be done without. The cashless economy is politically complicated, especially in developing economies. The central bank of nigeria recently pegged a limit of daily cash withdrawal and lodgment with commercial banks by any individual and corporate customer to n150,000. With the help of such an economy, the circulation of liquid money is more or less reduced. Central bank of nigeria the cashless nigeria project.
The absolute cost of cash to consumers, based on average transit time and cash access costs are high in some of the worlds most populous countries. For example, ejiofor and rasaki 2012 have noted that the cbn commenced the pilot scheme in lagos state apparently relying on its commercial stamina as nigerias business hub. The impact of central bank of nigeria cashless policy in nigeria economy. Mieseigha eg and uk ogbodo 20 an empirical analysis of the benefits of cashless economy on nigeria s economic development, journal of finance and account, vol. Cashless economy, cyber fraud, ebanking, point of sales. Nigerias cashless policy this case study features four large businesses that have derived clear benefits by early adoption of digital payments, including the nigerian bottling company contracted to cocacola, and the nigerian. Imperatives of advancing a cashless nigeria nigeria. Cashless economy free download as powerpoint presentation. The apex financial institution in any economy is the central bank of that country and it plays a major role in the economic advancement of that nation. Still, the scope of cashless nigerias ambition is a clear sign that nigerian policymakers are intensely focused on bringing their economy into. Babarox 2007 and laidler 2005 view a cashless economy as one where. The financial implications of a cashless society on individual.
This is electronic information transmitted to a device which reveals the information about how much a person has stored in the bank and how much he. Decock1998 defines a central bank as a bank which constitute the apex of the monetary and banking structure of a country and which performs as best as it can be in the national economic interest the following functions of regulations of. In europe, it is sweden that leads the way, with cash accounting for just 2% of the value of all payments in 2017, according to the countrys central bank. Jun 02, 2010 moneyless man reveals how to live a cashless life without starving separation between stomachs and the soil means most food comes in plastic packets, but eating for free can be fun my year of. Illegal activities will also stop over a period of time. A cashless economy is an environment in which money is spent without being physically carried from one person to the other. This means everybody must work, work for free, and get everything they want for free also. Since nigeria gained her independence in1960, there have been different constitutional reforms, change in economic and banking policies mainly aimed at stabilizing the economy, enhancing social welfare and.
It is in this regard that the central bank of nigeria cbn introduced the cashless policy with the objective of promoting. No one expects cashless nigeria to turn the economy digital overnight. It is universally agreed that a safe and efficient national cashless system is essential for sound banking. Nigeria, as one of the developing countries, is lacking behind in reaching the expected level in global economy and banking system, so there is a need to improve on the banking system and any. The response of large corporates and their value chains to government policies to shift to digital payments. The statistical evidence provided by central bank of nigeria 2012 revealed that, cash related transactions accounted for 99% of customers activities in nigeria banks as at december, 2011. As part of our ambition to be one of the best 20 economies before the year 2020, cbn informed the world that nigeria would commence the process of changing to a cashless economy by january 2012. A moneyless world already exists all around us the squirrel needs an acorn, the. A cashless economy is one in which all the transactions are done using cards or digital means. So i can see why the governor of the central bank of nigeria cbn was calling for a cashless economy. The new policy by central bank of nigeria cbn on cashless system of payment has raised a lot of concern to the growth of nigerian economy, with the objective of reducing robbery, high cost of. In nigeria as it is in many developing countries, cash is the main mode of payment. The study, impact of cashless economy in nigeria, focused on the three major categories by which nigerians can be divided traders, students and civ il servants.
Cashless economy is very good for stress free life. Cashless economy significance of cashless economy in india. The effect of cashless policy of government on corruption in. May 31, 2016 the absolute cost of cash to consumers, based on average transit time and cash access costs are high in some of the worlds most populous countries. Add an efficient electronic payments system to an economy, and you kick it into a higher gear. Effects of cashless economy policy on financial inclusion. Mar 20, 2019 indias drive for a cashless economy puts millions at risk of cybercrime kartikeya tripathi, ucl indias transition to a digital economy creates several new opportunities for financial criminals. A moneyless world operating on a gift economy one where people give and receive freely instead of paying for things might seem unimaginable, but try to think back and remember the last time you saw a squirrel whip out a credit card to buy an acorn. He wants to reduce cost involved in minting our naira as much as possible. Indias drive for a cashless economy puts millions at risk of cybercrime kartikeya tripathi, ucl indias transition to a digital economy creates several new opportunities for financial criminals. Cashless nigeria the central bank of nigeria cbn has introduced a new policy on cashbased transactions which stipulates a cash handling charge on daily cash withdrawals that exceed n500,000 for individuals and n3,000,000 for corporate bodies. Conceptual flow of cash based economy to cashless economy. Oct 24, 2017 the cashless economy is politically complicated, especially in developing economies.
The introduction of the cashless policy in march 2012 aimed to drive development and advance payment systems in nigeria. Moneyless man reveals how to live a cashless life without starving separation between stomachs and the soil means most food comes in plastic packets, but eating for. Any work that a society needs is considered legitimate. Nigerias move to a cashless regime the central bank of nigeria cbn in 2012 commenced the implementation of the policy of the cashless nigeria project, which aims at reducing not eliminating the amount of physical cash in circulation in the economy, and encouraging more electronicbased transactions. Particularly, it is wicksells pure credit economy framework that is abstracted. Cashless society also known as the hard cashless society or thc society are a southern african hip hop crew from gaborone, botswana and johannesburg, south africa.
But from the perspective of business and technology, its clearly more efficient and productive. This is an important factor that led to the introduction of cashless economy in nigeria. Recently, the cbn came out with two laudable agenda the islamic banking noninterest banking and the cashless economy epayment systembabalola,2008. The money economy is a form of economy in which transactions are done with money. This study evaluates the impact of the cashless arrangement in nigeria on. In view of the above, the central bank of nigeria cbn introduced the new policy on cashbased transactions which stipulates a cash handling charge on daily cash withdrawals that exceed n500,000 for individuals and n3,000,000 for corporate bodies. The impact of central bank of nigeria cashless policy in. The impact of the cashless policy on economic growth of nigeria. Cashless economy significance of cashless economy in. Money is impersonal and reduces qualitative values to a quantity. When, why and how the drive towards a cashless economy continues, with nordic countries leading the way. No cashless systems have fully replaced cash and credit cards yet, but many influential technology and finance companies believe that this is the next big thing. In addition, the policy aimed to reduce costs related to banking and facilitate the progression of monetary policy decisions and. This paper dwelt on the meaning of a cashless system, explain information.
Cashless economy and financial statement reporting in nigeria emengini, steve emeka ph. Nigerian 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. Nigeria abstract the paper discussed the effects of cashless policy on the nigerian economy, how it was kickstarted in lagos, means of payments both manual and electronic, positive and negative effects of cashless policy, benefits to the economy and stakeholders, suggestions were made. Pdf returns of the cashless policy in nigeria mpho. Preface why the central bank of nigeria made the cashless policy. In an attempt for nigeria to have sound economy as projected in vision 20. An exploratory study musa abdullahi bayero bayero university kano, gwarzo road kano, kano, nigeria abstract empirical studies about. The case of central bank of nigerias cashless policy. Keywords cashless society, electronic cash, emoney, moneyless economy i.
Nigerias aim to be among the biggest economy by 2020 has driven her to gradually move from a pure cash economy to a cashless policy. Securing the cashless economy 5 securing the cashless economy introduction the recent demonetisation move has had a huge impact on various sectors of the indian economy and has significantly impacted the way people transact in daily life. It prescribed a cash handling charges on daily withdrawal above five hundred thousand naira n500,000. Cashless policy could often be affected by physical challenges such as high rate of illiteracy, inadequate sensitizationeducation of the benefits of cashless policy, and inadequate logistics such as the provision of internet connections in commercial areas, computers and point on sale pos machines. Cashless nigeria is a policy established in the year 2012 by the central bank of nigeria to curb excesses in the handling of cash in the nigerian federation. In a cashless economy, little or very low cash flow is permitted. The cashless policy initiative in nigeria was introduced with the objective of driving the expansion, deepening and modernization of the payment systems in. A year after note ban, cashless economy is still a distant dream the number and value of cashless transactions, understandably, shot up right after the note ban, and has now come down to predemonetisation levels. Nigerias cashless policy better than cash alliance. The idea of a cashless economy has been around in one form or another since the early days of the internet, but its only now that it is starting to become a reality. Table 1 shows the view of respond ents on benefits of cashless economy in nigeria.
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