Effect of cashless police in nigeria Essay

Vol. 1 (2), pp. 040-043, April 2013.Research ArticleImpact of Cashless parsimoniousness in Nigeria*Omotunde Muyiwa1, Sunday Tunmibi,1 and John-Dewole A.T.21School of Computer Science, Mathematics and Information Technology, Houdegbe North Ameri bathroom University, Republic of Benin.2Department of Computer Science with Electronics, Faculty of Information Technology and Applied Sciences Lead City University, Ibadan. Nigeria.*Corresponding Authors telecommunicate folatunde2004yahoo.comABSTRACTThis paper studied the impact of cashless policy in Nigeria. The policy was introduced by telephone exchange Bank of Nigeria (CBN) in December 2011 and was kick-started in Lagos in January 2012. gaze research was adopted with questionnaire as data collection instrument. Responses from the answerings show that cashless policy provide increase employment reduce cash related robbery thereby cut risk of carrying cash cashless policy will also reduce cash related corruption and attract much i nappropriate investors to the country. The study, therefore, shows that the introduction of cashless saving in Nigeria can be seen as a step in the right direction. It is pass judgment that its impact will be felt in modernization of Nigeria payment system, drop-off in the cost of banking services, reducing in high security and safety risks and also curb banking related corruptions.Keywords Cashless sparing, Cashless policy, Lagos State, Nigeria.INTRODUCTIONCashless economy is an economy where transaction can be done without necessarily carrying physical cash as a means of exchange of transaction that rather with the workout of credit or debit card payment for goods and services. The cashless economy policy initiative of the Central Bank of Nigeria (CBN) is a move to improve the financial terrain but in the long run sustainability of the policy will be a function of endorsement and compliance by end-users (Ejiro, 2012). The CBN cash policy stipulates a day-to-day cumulative l imit of N150, 000 and N1, 000,000 on free cash withdrawals and lodgments by individual and corporate customers respectively in the Lagos State with effect from March 30, 2012.Individuals and corporate organizations that misrepresent cash transactions above the limits will be charged a service fee for amounts above the cumulative limits. Furthermore, 3rd party cheques above N150, 000 shall non be eligible for encashment everywhere the counter with effect from January 1, 2012. Value for such cheques shall be received by dint of the clearing house. All Nigerian banks were expected to dispense with cash in transit lodgment services rendered to merchant-customers from January 1, 2012.The policy through the advanced use of information technology facilitates fund transfer, thereby reducing sequence wasted in Bank(s). Wizzit, a fast growing mobile banking company in southwesterly Africa has over three hundred thousand customers across South Africa. Likewise, M-PESA was introduced in Kenya as a small value electronic system that is accessible from ordinary mobile phones. It has experienced exceptional increment since its introduction by mobile phone operator (Safaricom) in Kenya in March, 2007 and has already been adopted by nine million customers, which is about 40% of Kenyas adult population. Wizzit and roughly other mobile financial services including MPESA in Kenya are helping low income Africans make financial transaction across longdistance with their cellphones, thereby reducing their travel cost and eliminating the risks of carrying cash and also avoiding most banking charges (Akintaro, 2012).It is assumed that the proper implementation of mobile phones and other technologies can aid the implementation of cashless policy and hence, the growth of cashless economy in Nigeria. The introduction of the implementation of cashless policy (policy is program of actions adopted by government) began in Lagos State, Nigeria. Why Lagos? According to Central Bank of Nigeria (CBN, 2011) Lagos render accounted for 85% of POS and 66% of cheques transaction in Nigeria. Cashless economy aims at reducing the amount of physical cash circulating in the Nigeria economy and thereby encouraging more electronicbased transaction. According to Central Bank of Nigeria (CBN, 2011) the policy is expected to reduce cost incurred in maintaining cash-based economy by 90% upon its full implementation in Nigeria. This study aims to look at the impact of cashless economy in Nigeria.www.gjournals.org40Greener Journal of Internet, Information and Communication SystemsVol. 1 (2), pp. 040-043, April 2013.2. BRIEF LITERATURE freshen upCashless 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. According to Woodford (2003), Cashless economy is delimit as one in which there are assumed to be no transactions frictions that can be reduced through the use of bullion balance s, and that accordingly provide a reason for holding such balances even when they earn rate of return. In a cashless economy, how much cash in your pocket book is practically irrelevant. You can pay for your purchases by any one of a plethora of credit cards or bank transfer (Roth, 2010).(2004) observed that unquestionable countries of the world, to a large extent, are moving away from paper payment instruments toward electronic ones, especially payment cards. Some aspects of the functioning of the cashless economy are compound by e-finance, e-money, e-brokering and e-exchanges. These all refer to how transactions and payments are effected in a cashless economy (Moses-Ashike, 2011). Marco and Bandiera (2004) argue that increased usage of cashless banking instruments strengthens monetary policy strong point and that the current level of e-money usage does not pose a threat to the stability of the financial system. However, it does conclude that central banks can lose control over monetary policy if the government does not run a responsible fiscal policy.Echekoba and Ezu (2012), in a research carried out in Nigeria, observed that 68.2% of the respondent complained about long queues in the bank, 28.9% complained of bad attitude of teller officers (cashiers) while 2.89% complained of long distance of bank locations to their home or work places. Likewise, in her twenty-fourth NCS national conference in December 2011, CBN data shows that 51% of withdrawal done in Nigeria was through automated teller machine (ATM), while 33.6% was through over the counter (OTC) cash withdrawals and 13.6% through Cheques. Payment was also done through point of sales machine (POS) which accounted for 0.5% and web 1.3%. Therefore, if the introduction of ATM in Nigeria cash withdrawals system reduced OTC withdrawal then it will implies that introduction of cashless policy supported by application of information technology can achieve more to reduce over dependent on cash payment in N igeria economy system.However, Akhalumeh and Ohioka (2011) observed some challenges with the introduction of cashless policy. Their findings show that 34.0% of the respondents cited occupation of internet fraud, 15.5% cited problem of limited POS/ATM, 19.6% cited problem of illiteracy and 30.9% stayed neutral the respondent not been sure of problem been expected or experienced. While in some quarters there was fear of unemployment, some believe it will create more jobs especially when companies manufacturing POS machine are cited in Nigeria. much so, data sourced from Central Bank of Nigeria portal shows that Lagos state, with a population of 17 million pack, only has sixty onePoint Of Sales, twenty bank branches and twenty four ATMs per 100,000 people which are far less to satisfy the needs of the population. These data verify the claim of Echekoba and Ezu (2012) on the problem of cash based economy and cashless policy in Nigeria. For effective cashless implementation in Nigeria availability of sufficient and well-functioning infrastructure (notably electricity), harmonization of fiscal and monetary policy, regular assessment of the performance of cashless banking channels, consideration of the present state and structure of the economy, redesign of monetary policy framework and greater efforts towards economic growth whilst managing inflation should be considered (Odior and Banuso, 2012). 3. RESEARCH METHODOLOGYThis study was carried out, using accidental sampling method, in Lagos state, Nigeria. A total of 500 traders, students and civil servants were sampled. Questionnaire was used as data collection instrument, with questions on demographics and benefits of cashless economy in Nigeria. The major statistical technique used was descriptive (use of frequency tables and charts).4. RESULT4.1 Demographicsresponses on gender show that male respondents accounted for 55.6% while the female respondents are 44.4%. effigy 1 and Figure 2 presents the responses on age and occupation, respectively. For age, majority of the respondents are between 18 to 25 years, this is followed by those between 26 to 40 years while the to the lowest degree number are between 41 to 60 years. For occupation of the respondents, the highest voice (44.4%) is traders, followed by students (33.3%) and civil servants (22.2%).www.gjournals.org41Vol. 1 (2), pp. 040-043, April 2013.Greener Journal of Internet, Information and Communication Systems41-60 years22%18-25 years45%26-40 years33%Figure 1 Age of Respondents454035302520151050TradersStudentsCivil servantsFigure 2 Occupation of Respondents4.2 BenefitsTable 1 shows the view of respondents on benefits of cashless economy in Nigeria. The lowest percentage, 11.1% of the respondents, believed that cashless policy will increase employment. A higher percentage, 22.2% of the respondents, believed that cashless policy in Nigeria will reduce cashrelated robbery thereby reducing risk of carrying cash. The highest percentag e of the respondents believed that cashless policy will reduce cash related corruption (33.3%) and cashless policy will attract more foreign investors to the country (33.3%). Table 1 Benefits of Cashless Economy in NigeriaBenefits of Cashless EconomyIncrease employmentReduce cash related robberyReduce cash related corruptionAttract more foreign investmentTotalPercentage (%)11.1%22.2%33.3%33.3%100%www.gjournals.org42Greener Journal of Internet, Information and Communication SystemsVol. 1 (2), pp. 040-043, April 2013.5. CONCLUSIONThe study, impact of cashless economy in Nigeria, focused on the three major categories by which Nigerians can be divided traders, students and civil servants. More number of traders was sampled, compared to students and civil servants, because they are more into business and financial transactions. More so, a higher number of respondents within the age bracket of 18 and 25 years show that apart from students, quite a number of Nigerian youth arealso into tr ade.This study shows that the introduction of cashless economy in Nigeria can be seen as a step in the right direction. It is expected that its impact will be felt in modernization of Nigeria payment system, reduction in the cost of banking services as well as reduction in high security and safety risks. This should also include curbing banking related corruptions and fostering transparency.It is also assumed that the introduction of cashless policy in Nigeria will help to reduce the amount of bills and notes circulating in the economy. This should, therefore, reduce handling operation cost incurred on conventional money, as well as reduction in cash related crimes. It should also help to provide easy access to banking services for Nigerians.REFERENCESAkhalumeh, P.B., and Ohiokha, F. (2011) Nigerias Cashless Economy The Imperatives. International Journal of Management & personal credit line Studies. vol.2 pp. 12 17.Akintaro, S. (2012) Going Cashless. IT & Telecom digest, online ma gazine, august,2012 CENTRAL BANK OF NIGERIA (2011) Towards a Cashless Nigeria Tools & Strategies. Nigerian Journal of Economy. 3(2), 344 350.Echekoba, F.N., and Ezu, G.K. (2012) Electronic Retail Payment Systems User Acceptability & Payment Problems in Nigeria. Arabian Journal of Business & Management Review. vol.5, pp. 60 63. Ejiro, O. (2012) What Nigerians Think of the Cashless Economy Policy. Nigerian Journal of Economy. 4(6), 97 102.Humphrey, D. B. (2004) Replacement of cash by cards in U.S. Consumer Payments, Journal of Economics and Business, 56, 211225.Marco, A. and L. Bandiera (2004) -Monetary Policy, Monetary Areas and Financial Development with Electronic Money, IMF Working Study, IMF.Moses-Ashike, H. (2011),Cashless Economic can Reduce Risk of Carrying Huge Cash, Online Available http//www.businessdayonline.com//22217.Odior, E.S., and Banuso, F.B. (2012) Cashless Banking in Nigeria Challenges, Benefits & Policy Implications. European Scientific Journal. Vol 8, pp. 12 16.Roth, B. L. (2010). The Future of Money The Cashless Economy Part 1. Online Available https//www.x.com//future-money-cashless-economypart-i. Woodford M. (2003). Interest & Price Foundation of a surmisal of Monetary Policy, Princeton University Press.www.gjournals.org43