Problems and Prospects of Cashless Economy in a Less Developed Society Such as Nigeria; A Study of Ebonyi State Public Service 2017-2022

Problems and Prospects of Cashless Economy in a Less Developed Society Such as Nigeria; A Study of Ebonyi State Public Service 2017-2022

Abstract

This study investigated the problems and prospects of a cashless economy in a less developed society such as Nigeria, a study of Ebonyi State Public Service 2017-2022. The study examined three research objectives and adopted a descriptive survey research design. The study investigated how the cashless policy initiative benefited the Ebonyi State Public Service, how the adoption of a cashless policy can enhance the growth of financial stability as well as the impact of the cashless policy initiative on its acceptance level in the Ebonyi State Public Service. A questionnaire was designed in consonance with the Linkert 5-point scale to collect the required data/information for this study. The Statistical Package for Social Sciences (SPSS26) was used to analyse the data generated for this study. The findings of this study revealed that the introduction of the cashless policy has made financial transactions be carried out with ease and on time. According to an empirical evaluation carried out in this study, 63.6% of respondents strongly agreed or agreed that they preferred to conduct their financial activities using an ATM, POS, or mobile banking; 19.3% were unsure of this statement; and 17.1% disagreed or severely disagreed. This analysis suggests that the majority of the study’s respondents prefer to conduct their financial transactions using an ATM, a point of sale, or mobile banking. 52.3% of respondents agreed and strongly agreed that it is not safe to withdraw money using POS, ATM, or mobile banking, while 19.3% disagreed and strongly disagreed. Only 28.4% of respondents were unsure. This analysis shows that it is not entirely safe to withdraw money through the use of ATM, POS and mobile banking. Based on the empirical and statistical analysis conducted for this study, it was determined that the cashless policy initiative had a sizable positive impact on the Ebonyi State Public Service. This study also showed that the development of financial stability in the Ebonyi State Public Service was greatly boosted by the introduction of a cashless policy. Therefore, this research project showed that the cashless policy initiative’s level of adoption in the Ebonyi State Public Service is significantly impacted. Appropriate recommendations were also made.

 

CHAPTER ONE

INTRODUCTION

Background to the Study

Recent efforts by the Central Bank of Nigeria (CBN) to reform the Nigerian financial system and improve the country’s overall economic performance have been made to put Nigeria on the right track and in line with global trends. There was the agenda for capitalization, which cost at least N25 billion (Ajayi, 2019). The attempt to redenomination the Naira was likewise abandoned. The CBN has released two ostensibly admirable agendas: Islamic banking (no-interest banking) and the cashless economy (e-payment system). 2008’s Babalola.

Although several of these policy changes were first met with scepticism by Nigerians, they have since enjoyed great success. For instance, when the CBN in July 2004 set a December 31st,2005 deadline for N25billion minimum capitalization, it was greeted with considerable cries and criticism, when the programme was completed, the banking landscape was transformed out of a system dominated mainly by “fringe banks to one made up of largely “mega banks” (Adeyemi, 2019). To “guarantee a diverse, strong, and reliable banking industry where there is the safety of depositors’ money, and reposition the banks to play active developmental roles in the Nigerian economy,” the exercise’s result was to assure that (Adegbaju and Olokoyo, 2020). This statement encapsulates the analysts’ evaluation of the success of the reform plan.

Nigeria has been experiencing a growth turnaround in recent years, and the circumstances appear favourable for embarking on a path of sustained and rapid growth. This justifies its ranking among the N11 countries, which Goldman Sachs identified as having the potential to achieve global competitiveness based on their economic and demographic settings and the already-established foundation for reform. The Nigerian economy is too strongly cash-oriented in transactions of goods and services, which is out of step with global trends and hinders Nigeria’s desire to be among the top 20 economies of the world by 2020 (Abaenewe, Ogbulu, & Ndugbu, 2020).

Statement of the Research Problem

While we may cite the economies of Japan or the United States, we must be quite willing to recognise the fact that they are economies with sound institutional foundations, something that cannot be confidently affirmed in Nigeria. One concern, aside from the institutions, has been the state of Nigeria’s crumbling infrastructure. Have we seen the effects of infrastructure on the deployment of the “cashless economy” or is it assumed that the cashless economy will automatically arrive with the infrastructure required for it to function?  Even with everything being equal, there are certain drawbacks to a cashless society. Money is abstract by its very nature. The less money we have in our possession, the more ethereal it becomes and the more we lose sight of its true worth. The anxiety of not having access to cash is on the decline since our banking assets are now in an electronic form (Abaenewe, Ogbulu, & Ndugbu, 2020).

Anxiety still exists amongst Nigerians from every sector over how the advent of the cashless economy policy in Nigeria will influence businesses, pricing and economic stabilisation. In light of the aforementioned, one approach to offering a solution to the issue would be to ascertain, among other things, the degree to which the country’s adoption of the cashless economy policy will boost the growth of financial stability. how much the cashless economy plan will benefit Nigerians, how it will simplify business for them, and how widely it will be adopted.

Research Objective

The main objective of this study is to investigate the problems and prospects of a cashless economy in a less developed society such as Nigeria, a study of Ebonyi state public service 2017-2022. Specific objectives include to:

1. Investigate whether the cashless policy initiative is beneficial to the Ebonyi State Public Service.
2. Determine whether the adoption of a cashless policy can enhance the growth of financial stability in the Ebonyi State Public Service.
3. Investigate the impact of the cashless policy initiative on its acceptance level in the Ebonyi State Public Service.

Research Questions

The following research questions came up in this study:

1. What is the benefit of the cashless policy initiative to the Ebonyi State Public Service?
2. Has the adoption of a cashless policy enhanced the growth of financial stability in the Ebonyi State Public Service?
3. What is the impact of the cashless policy initiative on its acceptance level in the Ebonyi State Public Service?

 Research Hypotheses

The following hypotheses were tested in this study:

Null Hypotheses(H₀):

1. There is no significant benefit the cashless policy initiative to the Ebonyi State Public Service.
2. The adoption of a cashless policy does not significantly enhance the growth of financial stability in the Ebonyi State Public Service.
3. There is no significant impact of the cashless policy initiative on its acceptance level in the Ebonyi State Public Service.

Alternative Hypotheses(H₁):

1. There is a significant benefit of the cashless policy initiative to the Ebonyi State Public Service.
2. The adoption of a cashless policy significantly enhances the growth of financial stability in the Ebonyi State Public Service.
3. There is a significant impact of the cashless policy initiative on its acceptance level in the Ebonyi State Public Service.

Significance of the Study

This research work is highly important to students, scholars, stakeholders in the banking industry, and the Nigerian government. On the part of students and scholars, the study would add significantly to their previous knowledge concerning the topic of this study. The findings of this study will provide a policy guide to both stakeholders in the banking sector and the government.

Scope of the Study

This study was focused on investigating the problems and prospects of a cashless economy in a less developed society such as Nigeria, a study of Ebonyi state public service 2017-2022. The study also covered the benefit of the cashless policy initiative to the Ebonyi State Public Service, whether the adoption of a cashless policy can enhance the growth of financial stability in the Ebonyi State Public Service as well as the impact of the cashless policy initiative on its acceptance level in the Ebonyi State Public Service.

Limitations of the Study

Multiple restrictions ultimately limited the scope of the study and what the researcher could examine. The researcher could not have thoroughly reviewed more pertinent literature for this study in the period allotted for its completion. Additionally, there was no widely accessible study-related information, online or offline. This seriously impeded the study’s evaluation of the literature. Some of the research subjects in this study were reluctant to supply the pertinent data required for it. Hence, some of the administered questionnaires were not attended to. The totality of these limitations defined the scope and depth of this investigation.

Definition of Terms

Automated Teller Machine (ATM): an electronic telecommunications device that enables customers of financial institutions to perform financial transactions, such as cash withdrawals, deposits, funds transfers, balance inquiries or account information inquiries, at any time and without the need for direct interaction with bank staff.

Cashless society: one in which all financial transactions are handled through “digital” forms (debit and credit cards) in preference to cash (physical banknotes and coins). Cashless societies have been a part of history from the very beginning of human existence.

Mobile banking: a service provided by a bank or other financial institution that allows its customers to conduct financial transactions remotely using a mobile device such as a smartphone or tablet.

Internet Banking: an electronic payment system that enables customers of a bank or other financial institution to conduct a range of financial transactions through the financial institution’s website.

Financial stability: a property of a financial system that dissipates financial imbalances that arise endogenously in the financial markets or as a result of significant adverse and unforeseeable circumstances.

Cheque: a document that orders a bank to pay a specific amount of money from a person’s account to the person in whose name the cheque has been issued.

Organisations of the Study

There are five chapters in this study, the first of which discusses the background, statement of the research problem, aims, research question, and research hypotheses as well as the study’s significance, scope, and limitations. Chapter 2 contains conceptual, theoretical, and empirical reviews. The study methodology is covered in Chapter 3. This chapter covers the research design, the study’s population, the sample size and methodology, the data collection source and method, the study’s instruments, the data analysis method, and the validity and reliability of the study. Chapter four contains data presentation, Analysis and discussion of findings. Chapter five of this study encompasses the summary of findings, conclusion and recommendations.

 

References 

• Olaegbe R., (2019). Road to Cashless Lagos. Available: http://www.wmcltd.com.co.uk/cashlesssystem?.
• Olaiya, A. C. & Adeleke, K. O. (2019). Electronic banking and profitability of deposit money banks in Nigeria. Journal of Association of Professional Bankers in Education, 5(1), 129-151.
• Oluwatolani, O., Joshua, A., & Philip, A. (2021). The Impact of Information Technology in Nigeria’s Banking Industry. Journal of Computer Science and Engineering, 7(2), 63- 67.
• Oluyi, A. I., & Abioye, A. L. (2020). A comparative study of electronic banking service delivery in First Bank of Nigeria Plc and Guaranty Trust Bank Plc. International Journal of Media, Journalism and Mass Communications (IJMJMC), 6(3), 21-39.
• Shofawati, A. (2021). The role of digital finance to strengthen financial inclusion and the growth of SMEs in Indonesia. Paper presented at the 2nd International Conference on Islamic Economics, Business and Philanthropy (ICIEBP) page, 389–407.

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