International Journal of Research and Scientific Innovation (IJRSI) | Volume VII, Issue II, February 2020 | ISSN 2321–2705

Cashless Policy and Financial Inclusion in Nigeria

Gbalam Peter Eze¹, Dumani Markjackson^2*
1Department of Banking and Finance, Niger Delta University, Wilberforce Island, Bayelsa State, Nigeria
^2*Department of Banking and Finance, Federal Polytechnic, Ekowe, PMB 110, Yenagoa, Bayelsa State, Nigeria

Abstract – This study examines the impact of cashless payment systems on financial inclusion in Nigeria. This was aimed at ascertaining the level of financial inclusion caused by the cashless policy. The study was hinged on the theories of technology acceptance and diffusion of innovation. Thus, primary data was sourced and collated via structured questionnaires administered to 117 respondents and analyzed using simple percentages and presented using graphs. The data was further estimated using the ordered probit regression technique. The results indicate that nearness of financial products and service outlets to rural settlements, ease of digital financial transactions and reduced visits to banking halls aided by access to cashless payment mediums has enhanced financial inclusion in Nigeria. It also emerged that efficiency of cashless payment channels does not significantly reduce the use of financial products and services, hence financial inclusion. Furthermore, the results indicate that the desire to own bank account and excessive digital payment charges has a positive but insignificant influence on financial inclusion in Nigeria. The study concludes that cashless payment channels have enhanced equal access and use of financial products and services in Nigeria. The study recommends that the adoption of advanced financial technology (Fintech) that integrate all the attributes of the user groups would enhance user friendliness and further accelerate the penetration and use of bank financial products and services to rural settlements.

Keywords: cashless payment systems, cashless policy, financial inclusion, equal use and access, Nigeria.

I. INTRODUCTION

The advent of the need for money and by extension cash can be traced back to the barter era in the evolution of mankind. In this era, it was found that trade by barter which entails direct exchange of goods for goods, goods for services and or services for services was onerous and thus impede trade, division of labour and specialization, which is the hallmark of modern economies. Consequently, several types of currencies were used in different societies on the basis of their occupation until the advent of standardized currencies in about 3000 years ago in ancient Lydia(Almeida, Fazendeiro, & Inácio, 2018). Thus, making cash an integrate part of financial transactions due to ease, durability, granularity and trust in the ages past.