MPACT OF CBN CASHLESS POLICY ON THE DEVELOPMENT OF BANKING SECTOR IN NIGERIA

Yahaya Aisha Musa and Suleiman Purokayo Gambiyo
Volume 4 Issue 1

Abstract

The study investigates the impact of cashless policy on the development of banking sector in Nigeria, Adamawa state as case study, designed questionnaire is the main instrument that is used in collecting primary data from staff and customers of some selected financial institutions in Adamawa state (FUGAZ). Cashless policy was measured by customer’s perception with regard to financial inclusion (FINC) and cashless payment system (CSPS) to determine its impact on the development of banking sector (DVBS). Path analysis from structural equation models (SEM) was employed as the method of data analysis. The findings revealed that, Financial Inclusion had significantly impacted the Development in the Bank Sector with a regression weight of 2.1, indicating that Financial Inclusion significantly predicts changes in the Development in the Bank Sector. Specific indicators such as the relationship between Policy Infrastructure for Cashless PICT demonstrated a significant positive association. Similarly, the relationship between Cashless Payment System and DVBS was significant, signifying a substantial positive correlation between the variables. The study recommends that; the policy should incorporate local content, aligning with the core economic principles of Nigeria that are rooted in the socio-cultural values of its people. There is also pressing need for broader access to financial services. It is imperative to give greater attention to the factors influencing financial inclusion, including income, education, age, and gender. Additionally, priority should be given to factors such as formal account ownership, formal saving practices, and access to formal credit. The Central Bank of Nigeria (CBN) should engage in public enlightenment campaigns to educate the public about the intricacies of the cashless system. This will elevate awareness levels and potentially reduce resistance from the banking public Keywords: Cashless Policy, Banking Sector, FUGAZ

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