WILBERFORCE JOURNAL OF THE SOCIAL SCIENCES (WJSS)
ISSN: 2504 – 9232
Volume 7, No. 1, June 2022
Pages 15-32
DOI: 10.36108/wjss/2202.70.0120
CASHLESS POLICY AND VELOCITY OF MONEY IN NIGERIA: A QUANTITATIVE APPROACH
MICHAEL AMAEGBERI, STEPHEN Z. EKAINSAI AND MARK C. OKONMA
Abstract
Like most other developing economies, the banking sector in Nigeria had been operating an outdated conventional and quite problematic system for a very long time. In response, modern methods such as the cashless policy and E-banking have been adopted in the country with some salient improvements. This research thus examines Nigeria’s cashless policy and money velocity covering the period from 2012 to 2020. The study’s specific goal is to look at the velocity of money in circulation and its positive and negative impacts on banking services in the country. The analysis relied on data from the CBN’s quarterly Statistical Bulletin. To examine the cashless policy and the velocity of money in Nigeria, we used the Ordinary Least Square model. The model specified captured the money velocity in the Nigerian economy. Variables used were, Velocity of Money (MVELC) as dependent variable and Cheque value (CQVAL), ATM value (ATMVAL), POS value (POSVAL), internet (WEB) value (WEBVAL), Mobile payment value (MPVAL) and NIBSS instant payment value (NIPVAL) were used as independent variables. According to the findings, factors under consideration have a short-run link with the velocity of money in Nigeria. The findings showed that Nigeria’s cashless policy has increased the velocity of money which in turn improves the level of investment in the economy without carrying bulk money at hand. Based on the result, we therefore recommend that government should put more efforts to gear up awareness programmes, make sure that providers of internet services provide frequent and steady internet services and ensure that offenders of cybercrime are prosecuted when caught. We also recommend that since the problems lie more with regulation and security as well as the manner offenders are handled in the society, the banks and their staff ought to be held more responsible for losing people’s money in their watch to internet fraudsters as it is their duty to provide secured system for E-banking. We therefore conclude that awareness programmes should be actively encouraged to attain cashless policy to achieve economic growth and developments..
Keywords: Cashless Policy, Deposit Money Bank (DMBs), Technological Acceptance Model (TAM), Innovation Diffusion Theory (IDT).