Although the cashless policy promises to drive the development and modernization of the country’s payment system in line with Nigeria’s vision, it was not introduced in the best way. Read about M-PES and how the cashless policy is thriving in Kenya here.
The Central Bank of Nigeria’s cashless policy has been described as a laudable economic course of action that would enthrone fiscal responsibility among Nigerians as well as create an efficient and modern payment system that correlates with economic development if discreetly and strategically implemented.
It also believes that this course of action would reduce the cost of banking services , drive financial inclusion by providing more efficient transaction options and greater reach, and also improve the effectiveness of monetary policy in managing inflation and driving economic growth. In spite of the significance of this policy, its shoddy implementation has elicited hash reactions from members of the public. Many stakeholders had warned that the implementation of the policy should be gradual and progressive until the infrastructure needed for its full take-off are in place.
To say that the move by the CBN to get Nigerians to fully embrace cashless transactions was unsuccessful is an understatement. Although more Nigerians have become acquainted with online transactions as a result of the policy, majority of citizens, especially rural dwellers, still prefer cash transactions.
According to Tonny Omwansa’s book, Money, Real Quick, Kenya was full of airtime distributors — small-business owners who would sell people prepaid airtime. Some of them took up distributing M-PESA as well. The book states that for the initial launch, M-PESA was to be used to repay microloans made to extremely low-income people, often by NGOs and international charities.
Development economists, Tavneet Suri and William Jack looked into the benefits of M-PESA in a series of research papers. Their 2016 article published in Science, found that “access to M-PESA increased per capita consumption levels and lifted 194,000 households or two per cent of Kenyan households, out of poverty.” In fact, M-PESA was everywhere in Kenya as 96 per cent of households used it.
Over the past decade, M-PESA and competitors have worked to replicate the formula in Kenya across some countries in Asia and Africa. Today, M-PESA has 42 million active customers and 400,000 agents across seven countries. “When I was in school, my mum used to send me money through airtime and I sell it to the mobile phone operators and collect money,” said Susan Okereke, who at that time was schooling at the University of Benin while her family resided in Lagos.
According to the source, the situation has been compounded by shortage of people with tech skills workforce in the banking sector. He said there was a need for aggressive investments in the e-payment space of the banking sector to withstand the wave of takeover from the fintech as majority of bank customers are currently opening accounts with fintech companies to aid their day-to-day business requirement to forestall transaction failures.
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