A cashless economy is an environment in which money is spent without being physically carrying cash from one place to another. The need to run a more efficient and productive economy by reducing the amount of cash in circulation brought about the cash-less policy. The aim of this study is to investigate the impact of Central Bank of Nigeria’s cashless policy on economic growth and development of Nigeria. The research was carried out by investigating to find out whether or not cash-less policy influences the growth of the banking sector and to determine the difference between economic development in Nigeria before and after cash-less policy. The research design used in this study is the quasi-experimental to investigate the economic relationship between the period before and after CBN cash-less policy. Secondary data was obtained from CBN Statistical Bulletin and seminar papers. This study analyses the impact of cashless policy on the economic growth of Nigeria using the regression analysis to test the long run relationship between the variables and adopts granger causality to test the direction of influence. The study found that that there is significant difference in the growth of the economy before and after introduction of CBN cashless policy even though GDP has a higher mean value in pre cash-less policy suggesting that the economy perform better in the 8 years before cash-less policy. The development of innovative cashless banking has the potential to transform economic activity and achieve developmental goals when effective regulatory measures are continuously implemented at the domestic level. In other words, legal, regulatory and economic policy frameworks should evolve to cope with these new cash-less banking products.

TABLE OF CONTENTS 

TITLE PAGE………………………………………………………………………………1  

DECLARATION ................................................................................................................ iii 

CERTIFICATION ................................................................................................................ iv 

ACKNOWLEDGEMENT .................................................................................................... v 

ABSTRACT ........................................................................................................................... vi 

TABLE OF CONTENTS .................................................................................................... vii 

CHAPTER ONE ................................................................................................................... 1 

INTRODUCTION ................................................................................................................. 1 

1.1  Background to the Study ................................................................................................. 1 

1.2       Statement of the Problem ............................................................................................... 3 

1.3       Statement of the Research Questions ............................................................................. 5 

1.4       Objectives of the Study .................................................................................................. 5 

1.5       Statement of the Research Hypotheses .......................................................................... 5 

1.6       Scope of the Study ......................................................................................................... 6 

1.7       Significance of the Study ............................................................................................... 6 

1.8  Limitations of the study .................................................................................................. 7 

1.9   Definition of Terms............................................................................................................ 7 

CHAPTER TWO................................................................................................................... 9 

LITERATURE REVIEW ...................................................................................................... 9 

2.1       Introduction .................................................................................................................... 9 

2.2      Concept of Cashless Policy ............................................................................................. 9 

2.3       Concept of the Cash Era .............................................................................................. 14 

2.4       Concept of Economic Growth and Development ........................................................ 15 

2.5  Concept of E-Commerce............................................................................................... 18 

2.5.1    The historical development of e-commerce ................................................................. 19 

2.6       Benefits of Cashless Policy .......................................................................................... 20 

2.6.1    Problems of Cashless Economy ................................................................................... 22 

2.7       Transmission Channels for Cashless Policy ................................................................ 24 

2.7.1    Cashless Policy Implementation and Economic Development ................................... 27 

2.7.2    Cashless Policy Implementation and Economic Growth in Nigeria ............................ 32 

2.7.2.1    History of Bank Notes                   --------------------------------------------------------33 

2.7.2.2 Security and Privacy Issues                           ------------------------------------------33 

2.8       E-Marketplaces ............................................................................................................ 35 

2.8.1  Types of e-marketplace .................................................................................................. 35 

2.8.2      E-Banking .................................................................................................................. 37 

2.8.3   Various Forms of E-Banking ........................................................................................ 38 

2.8.4      Roles of Electronic Commerce (E-Commerce) in Banks .......................................... 41 

2.9     Customers' Satisfaction and Orientation .................................................................... 42 

2.10     Cash Management in the Bank .................................................................................. 45 

2.10.1      Management for Cash and Marketable Securities ................................................... 48 

2.11       Empirical Review....................................................................................................... 52 

2.12      Theoretical Framework ............................................................................................... 56 

2.12.1     Capital Rationing Theory:......................................................................................... 56 

2.12.2     Merton and Bodie Theory: ........................................................................................ 57 

2.12.3     Theories of economic development .......................................................................... 58 

2.12.4      Trade-Off Model ...................................................................................................... 62 

CHAPTER THREE ............................................................................................................. 63 

RESEARCH METHODOLOGY ........................................................................................ 63 

3.1     Introduction .................................................................................................................... 63 

3.2     Research Design............................................................................................................. 63 

3.2       Sources of Data ............................................................................................................ 64 

3.3     Model Specification ....................................................................................................... 64 

3.3.1    The Correlation Coefficient ......................................................................................... 66 

3.3.2   Coefficient of Determination ........................................................................................ 67 

3.4       Data Analysis Technique ............................................................................................. 67 

3.5   Test of Difference of Means Method ............................................................................... 68 

CHAPTER FOUR ............................................................................................................... 70 

DATA PRESENTATION, ANALYSIS AND DISCUSSION OF FINDINGS ...................... 70 

4.1  Presentation of Data ...................................................................................................... 70 

4.1.2  Descriptive Statistics ................................................................................................. 72 

4.2  Test of Hypotheses ........................................................................................................ 74 

4.2.1  Hypothesis One ......................................................................................................... 75 

4.2.2  Hypothesis Two......................................................................................................... 76 

ix 

4.2.3  Hypothesis Three....................................................................................................... 76 

4.2.4  Joint Relationship ...................................................................................................... 77 

4.2.5  Joint Impact (F-Test) ................................................................................................. 78 

4.3  Discussion of Findings .................................................................................................. 78 

CHAPTER FIVE ................................................................................................................. 80 

SUMMARY, CONCLUSION AND RECOMMENDATIONS ......................................... 80 

5.1  Summary ....................................................................................................................... 80 

5.2  Conclusion .................................................................................................................... 81 

5.3  Recommendations ......................................................................................................... 82 

References ................................................................................................................................ 83 

Apendix .................................................................................................................................... 90