Abstract
This study examined the effects of Nigeria's cashless policy on various economic aspects in Benin City, Edo State. As part of Nigeria's broader initiative to transition towards a digital economy, the cashless policy aimed to reduce reliance on physical cash and promote electronic transactions. The research focused on three primary objectives: assessing the impact on liquidity and the velocity of money, evaluating the implications for the accessibility and affordability of financial services, and investigating the influence on financial inclusion and overall economic growth. Employing a descriptive survey research design, data were collected from a sample of 250 respondents across the four local governments in Benin City. A structured Likert scale questionnaire was used, gathering demographic information and responses related to the study's objectives. Data analysis was conducted using frequency tables and simple percentages to extract insights from the participants' perspectives.
The study revealed that the cashless policy significantly enhanced liquidity in Benin City, speeding up and improving fund circulation. However, the study also revealed mixed perceptions regarding its impact on the velocity of money, with some respondents facing initial challenges in adopting digital payments. The policy expanded access to financial services, especially for underserved populations, but raised concerns about affordability due to perceived high costs of digital transactions. The study highlighted the cashless policy’s positive role in promoting financial inclusion and economic growth by lowering barriers to banking for lowincome groups and boosting economic activities. These benefits suggest the policy could be crucial for inclusive economic development.
Based on the findings of the study, the study suggested some action-based recommendations. The study recommended continuing to support and expand the cashless policy in Benin City, as it has improved money liquidity and transaction efficiency. Promoting digital payment systems further can enhance these benefits. Again, the study recommended addressing the high costs of digital transactions, which hinder widespread adoption. Reducing fees and simplifying digital platforms are necessary to make financial services more affordable and accessible, especially for underserved populations. Lastly, the study recommended leveraging the policy's positive impact on financial inclusion and economic growth. By enhancing access to banking for lowincome groups and driving economic activities, the policy should be refined and supported to sustain its role in fostering inclusive economic development.
