Running a Small-scale Business in a Cashless Economy; The Survival Strategy Needed to Be Adopted
Chapter One
Objective of the study
The primary objective of this study is to investigate the challenges and opportunities faced by small-scale businesses in Nigeria in adapting to a cashless economy. Specifically, the study aims to:
- Identify the key barriers hindering the adoption of digital payment solutions among small businesses.
- Assess the impact of the transition to a cashless economy on the financial inclusion of underserved communities and explore strategies to improve access to digital payment services for marginalized populations.
- Examine the role of government policies and regulatory frameworks in shaping the landscape of digital payments in Nigeria
CHAPTER TWO
REVIEWED OF RELATED LITERATURE
Overview of the Cashless Economy in Nigeria:
In Nigeria, like in many other countries of the world, there has been a transition from cash based economy to cashless economy in recent years. The Central bank of Nigeria (CBN) has been responsible for the policy implementation which was launched in the year 2012. The usage of cashless payment systems has increased as a result of government initiatives to encourage electronic payments in order to minimize cash transactions and advance financial inclusion. Based on the report of Nigerian Inter – Bank Settlement System (NIBSS), electronic payment transactions in Nigeria witnessed an increase from 127.1 million in 2012 to 1.4 billion in 2018, representing a growth of over 1,000%. Although, the shift to a cashless economy has been praised for its potential advantage as per above record, there is rising worry about how it will affect small business owners, especially in areas with little infrastructure and limited resources. The cashless economy in Nigeria is driven by so many electronic payment systems among which are; debit and credit cards, mobile money, online banking, point of sale (POS) devices, and internet banking. The debit and credit cards offered by banks in Nigeria are very common for banked population in Nigeria. The cards can be used by bank customers for online transactions and in stores or supermarkets transactions. A report by the CBN has a record of the number of active debit cards in Nigeria increased from2.2 million in 2012 to 106 million in 2020. Similarly, the Mobile banking services allow holders to transfer money using their mobile phones which has made transactions easy in Nigeria without someone visiting the bank personally. The available Telecoms and financial institutions offer mobile money services, with over 2.1 million mobile money agents operating in Nigeria as at 2020. The online banking platforms through the banking Apps can be downloaded by users on their phones and is used to transact business and generate receipts just like in the banking hall. The available records of active internet banking subscribers in Nigeria increased from 1.2 million in 2012 to 43 million in 2020 according to CBN reports. The Point of sale (POS) devices allows customers to use their debit cards or bank account numbers to create transactions. And as at April 2022 there were over 1.1 million active POS devices in Nigeria compare to 155,000 in 2012, according to NIBSS. Furthermore, internet banking allows the customers to make payments over the internet, such as transfer of funds, payment of bills, and checking account balances. As at 2020, based on CBN reports, there were 43 million active internet banking subscribers in Nigeria.
CHAPTER THREE
RESEARCH METHODOLOGY
INTRODUCTION
In this chapter, we described the research procedure for this study. A research methodology is a research process adopted or employed to systematically and scientifically present the results of a study to the research audience viz. a vis, the study beneficiaries.
RESEARCH DESIGN
Research designs are perceived to be an overall strategy adopted by the researcher whereby different components of the study are integrated in a logical manner to effectively address a research problem. In this study, the researcher employed the survey research design. This is due to the nature of the study whereby the opinion and views of people are sampled. According to Singleton & Straits, (2009), Survey research can use quantitative research strategies (e.g., using questionnaires with numerically rated items), qualitative research strategies (e.g., using open-ended questions), or both strategies (i.e., mixed methods). As it is often used to describe and explore human behaviour, surveys are therefore frequently used in social and psychological research.
POPULATION OF THE STUDY
According to Udoyen (2019), a study population is a group of elements or individuals as the case may be, who share similar characteristics. These similar features can include location, gender, age, sex or specific interest. The emphasis on study population is that it constitutes of individuals or elements that are homogeneous in description.
This study was carried to examine Running a small scale business in a cashless economy: The survival strategy needed to be adopted. Selected SMEs in Lagos form the population of the study.
CHAPTER FOUR
DATA PRESENTATION AND ANALYSIS
INTRODUCTION
This chapter presents the analysis of data derived through the questionnaire and key informant interview administered on the respondents in the study area. The analysis and interpretation were derived from the findings of the study. The data analysis depicts the simple frequency and percentage of the respondents as well as interpretation of the information gathered. A total of eighty (80) questionnaires were administered to respondents of which only seventy-seven (77) were returned and validated. This was due to irregular, incomplete and inappropriate responses to some questionnaire. For this study a total of 77 was validated for the analysis.
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATION
Introduction
It is important to ascertain that the objective of this study was to ascertain Running a small scale business in a cashless economy: The survival strategy needed to be adopted. In the preceding chapter, the relevant data collected for this study were presented, critically analyzed and appropriate interpretation given. In this chapter, certain recommendations made which in the opinion of the researcher will be of benefits in addressing Running a small scale business in a cashless economy: The survival strategy needed to be adopted
Summary
This study was on Running a small scale business in a cashless economy: The survival strategy needed to be adopted. Three objectives were raised which included: Identify the key barriers hindering the adoption of digital payment solutions among small businesses, assess the impact of the transition to a cashless economy on the financial inclusion of underserved communities and explore strategies to improve access to digital payment services for marginalized populations and examine the role of government policies and regulatory frameworks in shaping the landscape of digital payments in Nigeria. A total of 77 responses were received and validated from the enrolled participants where all respondents were drawn from selected SMEs in Lagos state. Hypothesis was tested using Chi-Square statistical tool (SPSS).
Conclusion
In conclusion, this study examines the impact of cashless economy on small business operators in Lagos state, Nigeria. The findings of the research revealed that transition to a cashless economy has a perceived impact on the performance of small business operators. However, significant challenges were identified, including the lack of access to electronic payment infrastructure and low levels of awareness and education on the benefits of cashless transactions. Furthermore, government policies and initiatives aimed at promoting a cashless economy have not been fully effective in supporting the growth of small business operators in Lagos state to benefit from the transition to cashless economy, including increased efficiency, cost savings and access to new markets.
Recommendation
Based on the findings of this study, several recommendations can be made to support small-scale businesses in Nigeria in navigating the challenges and opportunities of operating in a cashless economy:
- Government and private sector stakeholders should collaborate to expand access to reliable internet connectivity and power supply, particularly in rural and underserved areas. Investments in digital infrastructure are essential to ensure that small businesses can fully leverage digital payment technologies.
- Initiatives aimed at promoting financial inclusion should prioritize reaching underserved populations, including women, rural communities, and low-income earners. This may involve targeted education and awareness campaigns, as well as the development of user-friendly and accessible digital financial services.
References
- Abdullahi, A. (2019). The impact of cash policy on small and medium enterprises (SMEs) in Nigeria. Journal of Business and Management.
- Adedeji,A.;Oluyemi, F. (2021). The impact of cashless policy on small Businesses in Nigeria:Evidence from selected states. Journal of Economics and Sustainable Development, 12(11), 1-10.
- Adedoyin, R. A. (2017). The impact of cash policy on economic growth in Nigeria. European Journal of Accounting Auditing and Finance Research.
- Adegbaju,A,;Oladeji, T. (2020). Cashless Economy in Nigeria:Percieved Benifits and challenges for small and medium. European Journal of Social Science studies, 5(7), 1-10.
- Ademola, O. &. (2019). The adoption of cashless policy and its impact on the Nigerian Economy. International Journal of Scientific Research and Management, 7(4), 21-28.
