EFFECT OF CASHLESS POLICY ON SMALL AND MEDIUM BUSINESS IN NIGERIA
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EFFECT OF CASHLESS POLICY ON SMALL AND MEDIUM BUSINESS IN NIGERIA
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
The body of existing literature (Daasi, 2012; Nelson & nelson, 2010; Gboski, Joshua & Stephen, 2007) has consistently agreed that small and medium-sized enterprises have the potential to strengthen the economy of any country through the creation of jobs and an increase in the flow of capital.
This calls for the formulation and implementation of policies that will improve the economy’s growth and performance. The central bank of Nigeria (CBN) has implemented a cashless policy, which has demoted SMEs to a description of the industry’s “dwindling glory.” Performance, expansion, and operation of SMEs, particularly in rural regions, bear this out.
When compared to what other economic sectors (with less significant economic implications) have been able to do, the situation is more troubling. Studies that demonstrate a strong association between SMEs’ operations, performance, and growth have also been used to characterise the issue.
The development and improvement of the performance, operations, and expansion of SMEs should therefore be strongly sought if the goals of SMEs, which are generally hailed by researchers (Daasi, 2012; Nelson & nelson, 2010) as a boast to the economy, will be achieved.
The expansion of SMEs in Nigeria is a result of the availability of funding and efficient use of mechanisms that improve their operation, performance, and growth in terms of transaction execution.
Therefore, failing to do the aforementioned could impede the development of SMEs, especially in light of the recent implementation of the cashless policy, which mandates the use of ATMs, online banking, and other technologies.
This makes the situation even more troubling for SMEs, particularly those operating in rural areas due to proximity, a lack of awareness and education, and access to Information and Communication Technology (ICT) (Ebepanipre & Oyuoyo, 2013; James, 2013).
The introduction of the cashless policy could be both a hardship on the operators and an economic burden due to the categorization of SMEs as a business that utilises average trade capital and the highest number of participants operating in the lowest strata of the economy.
The monetary system is changing to include electronic money as legal tender for exchange with the introduction of information technology and the internet. The emergence of a cashless economy, where electronic money takes the place of the current legal currency (which is paper money and coins),
has been noted in a number of academic works. This initiative has spread around the world. According to Bonugli (2006), as more and better systems emerge around the world, bank notes and coins are increasingly being phased out as a means of payment for transactions.
Nigeria is not exempt from this trend, as the Central Bank of Nigeria has made multiple attempts to overhaul the Nigerian financial system, the cashless policy being the most recent. Prior to the cashless economy, there was the objective for recapitalization,
followed by the redenomination of the naira, non-interest (Islamic) banking, and finally. Some of these policies were well received by the populace, while others were met with hostility. Resistance is inevitable with any attempt at change, though.
The recapitalization agenda, which began in 2005, has proved successful despite Nigerians’ scepticism. The Islamic banking system and the redenomination of the Naira received harsh criticism.
For instance, the redenomination of the Naira was deemed to be ineffective, and the proponents of the idea of non-interest banking are charged with concealing their true intentions (Akhalumeh and Ohiokha, 2012).
Such opponents have not spared the cashless policy, so if it is to endure, it must address the public’s worries. Although the benefits of adopting a cashless economy have been heavily emphasised, many people are still sceptics, particularly SMEs who make up a significant portion of the economy.
STATEMENT OF THE PROBLEM
Therefore, the goal of this study is to determine whether the implementation of a cashless policy has any effect on small and medium-sized businesses in Nigeria, with an emphasis on Edo State. Determine the characteristics of small and medium-sized businesses in the study area.
Identify the obstacles that have prevented small and medium-sized businesses in the study area from adopting a cashless policy. Determine whether a cashless policy has helped small and medium-sized businesses in the study area grow. Examine the effect of a cashless policy on the performance of small and medium-sized businesses in the study area.
1.3 OBJECTIVES OF THE STUDY
The goals of this study are as follows:
To investigate how Edo State’s small and medium companies are affected by the cashless policy.
To identify the traits of small and medium-sized enterprises in Edo State.
To examine the issues that have prevented small and medium-sized enterprises in Edo State from implementing a cashless strategy.
1.4 RESEARCH QUESTIONS
What impact does Edo State’s cashless policy have on small and medium-sized businesses?
What distinguishes Edo State’s small and medium businesses?
What issues have prevented small and medium-sized enterprises in Edo State from implementing a cashless policy?
1.5 HYPOTHESIS
HO: In Edo State, there is no discernible connection between the adoption of a cashless policy and the growth of SMEs.
HO: In Edo State, there is a considerable connection between the cashless policy and SMEs’ economic growth.
1.6 SIGNIFICANCE OF THE STUDY
The relevance of this study is as follows:
The findings of this study will inform small and medium business managers and the general public about the impact of cashless policies on SMEs and offer coping mechanisms to ensure profitability while utilising contemporary technology.
This study will add to the body of knowledge about the impact of personality characteristics on students’ academic achievement, forming the empirical base for further study in the field.
1.7.2 SCOPE AND LIMITATIONS OF STUDY
Only SMEs in Edo State are included in this study. The relationship between the cashless policy and the growth of SMEs in Edo State’s economy will also be covered.
LIMITQATIONS OF STUDY
Financial restraint: A researcher’s ability to collect data (through the internet, a questionnaire, and interviews) and locate relevant materials, literature, or information is often hindered by a lack of funding.
Time restraint: The researcher will do this investigation together with other academic activities at the same time. Consequently, less time will be spent on the research job.
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