1.1          Background to the Study

The inauguration of online banking and mobile banking in Nigeria has paved way for a new period of development where the use and demand for physical cash is gradually declining. These current evolution of innovation in the Nigerian banks have fascinating questions for financial expert, banks, business analyst and the government concerning the present economic condition, logistics, and availability of instruments to ensure economic growth and security, performance and efficiency of the cashless policy.

Since the creation of humankind, different payment techniques have been utilized to buy goods and services beginning with the trade by barter. The trade by barter method of transaction was the foundation for the introduction of money and coins to solve the issue of double coincidence of wants and divisibility encountered by trade by barter. The use of money/coins was presented after using trade by barter approach, and it has since solved different challenges related to trade by barter, however using money as an exchange medium has its very own obstacles and disadvantages and can still be replaced with a much better payment system which is the cashless policy/banking.

Different benefits enjoyed by more developed countries such as the US triggered the Central Bank of Nigeria (CBN) to embrace the cashless policy. At the end of the 1980s the use of cash for buying consumption products in the US continuously dropped with inflation (Humphrey, 2004). Nigeria's aimed to be amongst the biggest economy by 2020 drove her to slowly move from a pure cash economy to a cashless policy. Since Nigeria got her independence in1960, there have been various constitutional reforms, change in economic and banking policies primarily targeted at stabilizing the economy, improving social welfare and enhancing economic development and growth.

In view of being amongst the very best and biggest economies in 2020, the CBN started executing the cashless policy/banking in some major states/cities in Nigeria like Lagos, Ibadan, Kano, Port-Harcourt, Abuja and Onitsha. The CBN and Pro cashless policy activists asserted reduction in crime rates, reduced danger related to carrying substantial sums of cash, reduction in political corruption, reduction in banking cost, enhancement on monetary policy in management of inflation and the general growth and advancement of the economy of Nigeria as benefits related to the implementation of the cashless policy.

A cashless economy is a situation where money is spent without being physically carried from one place to another. Electronic devices as means of information that expose how much an individual has deposited and has spent are needed. Information technology plays an essential role in bringing about sustainable growth in every country. Without an ideal use of information technology, no nation can achieve a fast socioeconomic development and growth. The future of all businesses especially those in the services sector depends on information technology, as a matter of fact, information technology has been transforming the ways companies and financial institutions compete. Information technology is more than computer systems, it encompasses the data a business produces and makes use of in addition to a broad range of increasing convergent and linked technologies that process such data.

Using internet and websites to bundle a host of services that exceed transactional financial services which is increasing amongst financial institutions. The banking sector has undergone lots of organizational changes in time in a bid to help with easy production and trade of services and products. Nevertheless, with accelerating development of the financial systems the central bank introduced agency banking. Agency banking is swiftly developing and its regulation plays a central role in allowing (or sometimes limiting) it spreads. Regulators are needed to strike a balance between promoting monetary inclusion with profitable, reduce cost delivery models, and protecting consumers and the stability of the financial system. Agency banking, according to Investopedia (2020), is when a syndicate manager gets a mandate from a creditor to set up a syndicated loan. Agency Banking has been recommended due to the increased need for customer deposit in Nigerian financial institutions, particularly the new generation banks that have realized the imperative of goods and prompt customer services it will provide.

               Furthermore, many financial service providers on the African continent, particularly in Nigeria, find it challenging and unnecessary to open branches in remote areas of the nation, necessitating the use of a third party (Agent) to provide financial services to people in those areas. Consequently, the study is needed to establish the relationship between agency banking and customer accessibility and profitability in Nigeria, provided the low level of computer literacy and its effect on the economy. This study tends to investigate if cashless policy has effect on mobile money and agency banking in Nigeria.

1.2          Statement of the Problem

               Monetary policy as a technique of financial management to cause lasting economic growth and development with cashless policy and banking introduced by the Central Bank of Nigeria (CBN) is not totally practical due to high level of illiteracy, insufficient sensitization/education of the benefits of the cashless policy, and poor logistics (such as the availability of internet connections in commercial areas, computer systems and Point on Sale (POS devices).

Aside from the physical challenges, economic data and indications are not totally available and dependable. There is a terrific challenge in attempting to assess the true impact of the cashless policy on the economy of Nigeria as just few monetary and macroeconomic indications can be traced with relation to the topic.

In spite of the introduction of the cashless society policy since 2013, mobile money penetration in the nation still stands at a paltry one percent as compared to penetration levels of 60 percent and 40 percent specifically for Kenya and Ghana (GSMA, 2018). The use of mobile money and agency banking will no doubt contribute significantly to the growth to the economy, provided political and socioeconomic factors are being kept constant.

1.3          Objectives of the Study

               The main objective of the study is to examine the impact of cashless policy on mobile money and agency banking in Nigeria. The specific objectives include:

i)              To understand the reasons for the introduction of cashless policy in Nigeria.

ii)            To examine the contributions of agency banking and mobile money on the economy of Nigeria

iii)          To determine the effect of the cashless policy on the economic growth of Nigeria.

iv)          To ascertain the influence of cashless policy on the economy of Nigeria.

1.4          Research Questions

Based of the above stated objectives, the following research questions have been drawn to guide the study:

i)              To understand the reasons for the introduction of cashless policy in Nigeria.

ii)            To examine the contributions of agency banking and mobile money on the economy of Nigeria

iii)          To determine the effect of the cashless policy on the economic growth of Nigeria.

iv)          To ascertain the influence of cashless policy on the economy of Nigeria.

1.5          Research Hypotheses

The followings are the research hypotheses for this study:

i)              There is a significant correlation between contributions of agency banking and mobile money and the economy of Nigeria.

ii)            Cashless policy does not have any significant effect on the economic growth of Nigeria.

1.6          Significance of the Study

               The study will give various insights into the various implications the introduction of the cashless policy will have on the economy of Nigeria. Through examining various economic indicators such as the gross domestic product (GDP) and inflation, the study will examine and compare growth trends and changes to determine whether the cashless policy introduced by the CBN has a negative or positive effect on the economy of Nigeria.

               Various challenges and prospects identified in the study will also enable various stakeholders to tackle these challenges effectively by making policies that will address them and boost the economy of Nigeria.

               In the realm of academia, the study will be useful to a broader audience as it applies in the courses of accountancy, marketing, banking, and finance, as well as executive development and management courses taught in universities, polytechnics and colleges. And also, in the payment of tuition fee in colleges schools and universities.

1.7          Scope of the Study

               In pursuance of the objective of the study; attention shall be focused on mobile money, agency banking, and electronic banking among other electronic commerce implementation.

1.8          Limitations of the Study

               The fact that this study was required to be carried out simultaneously alongside the other academic activities limits the researcher from rigorously carrying out the research. The researcher was also constraints with time which was too limited to allow for detailed and much more detailed research work. Finance was also part of the research constraints.

1.9          Definition of Terms

Agency banking: is a way of providing limited banking services to bank customers through the use of agents who usually are not traditional bankers or banking businesses.

ATM Card: also known as a bank card, client card, key card, or cash card is a payment card provided by a financial institution to its customers which enables the customer to use an automated teller machine (ATM) for transactions such as: deposits, cash withdrawals, obtaining account information, and other types of banking transactions, often through interbank networks.

Automated Teller Machine (ATM): This is an online banking platform that allows customers to perform or complete transactions without the presence of a branch or ATM delegate or teller at a bank when a credit card is used, it is a machine that dispenses cash or other banking services.

Mobile Money: is a service that allows users to conduct fund transfers, make payments, and check their balances on their phones. This term also refers to the broader realm of electronic commerce; it can refer to using a mobile device to acquire items, both physical and electronic.

Point of Sale (POS): a computer-based platform controlled by a central virtual system and linked to multiple checkout terminals. It is the location in a store where a commodity is moved from the vendor to the consumer.