What Nigerians think of the cash-less economy policy

Another big leap in CBN policy?
No doubt, the cash-less economy policy initiative of the Central Bank of Nigeria (CBN) is a move that will improve the financial terrain but in the long run, sustainability of the policy will be a function of endorsement and compliance by end users.

The level of endorsement can be effectively gauged by research that bears the minds of the end users. In the light of this, we conducted a survey to determine among other things:

• The extent to which Nigerians understand the cash-less economy initiative,
• Its level of acceptance,
• The extent to which they perceive the policy will ease business for them , and
• Changing attitudes towards ATM and online banking.

It’s all about the people
To achieve objectivity, respondents were randomly selected from the Top/middle segment of society as well as the Lower segment (Please, refer to footnote for definition of Top/middle and Lower segment as used in this research). They were reached through various channels, including: focus group discussions, online questionnaires and one-on-one interview.

Overall, 200 respondents from the Top/ middle segment and 150 respondents from the Lower segment participated in the survey. They include teachers, doctors, traders, artisans, researchers, media personnel, bankers and students drawn from the six geopolitical zones. A kaleidoscope of information was gathered at the end of the analysis.

Policy masked by information asymmetry
From the analysis, it was discovered that there is a very wide disparity between those who know what a cash-less economy is and those who do not between the two segments. When the different groups were asked if they know what a cash-less economy is, only 34.6 percent of the Lower segment said, yes, in the Top/middle segment, 91 percent said, yes.

If these responses are combined with responses to the question: “Will the cash-less economy policy make business easier for you?” One can reasonably conclude that the whole essence of the policy has not be effectively disseminated across the strata.

Fifty-two percent of the Top/middle segment said, yes, when they were asked if the policy will make business easier for them, 21 percent said, no, while 27 percent said “I don’t know”. Most respondents in the Top/middle segment know what a cash-less economy is, but don’t know if it will make the way they spend money remarkably easier.

It is said that if gold rusts, what will iron do? If 27 percent of the Top/middle segment of the society is ignorant of the effect the policy will have on their businesses, one need not look into a crystal ball to know that ignorance on this subject is still endemic. Those in the lower segment are the most ill-informed about how the policy will affect their businesses.

When they were asked if the policy will ease businesses for them, 55 percent in the Lower segment said, no, while the remaining 45 percent said, yes, I do not know or did not respond to the question at all. So, if the CBN fully implements the policy tomorrow, almost half of those in the Lower segment and a fraction of those in the Top/middle will take it with jaundiced view.

We therefore asked the respondents if they are ready for the policy, again we saw disparity among the groups. Those in the Top/middle segment were more affirmative than those in the Lower segment, 61.2 percent in the Top/middle segment said they are ready, while 38.8 percent said they are not. In the Lower segment, only 26.9 percent said they are ready. Amazingly, during one of the focus group discussions, a respondents in the Lower segment said she is not interested in a policy that will require her to collect cheques in return for her tomatoes!

It must be said that not all the findings of the survey, which was responded to by mostly individuals within the 25-50 years age bracket, were grey as the analysis confirmed a positive commonality in attitudes towards ATM usage between the two groups. Before now, research had pointed to decline in patronage of ATM machines, but as things stand currently, the figures on usage are growing across the segments.

Respondents were asked if they have ATM cards and use them. Most respondents said they do.  84.4 percent of those in the Top/middle segment said they have and use their ATM cards while only 2 percent said they don’t trust the technology. 8.1 percent said they have ATM cards but do not use.

For the Lower segment, 61.2 percent said they have ATM cards and use them. Only 10 percent said they don’t have and don’t want. This change in attitude may not be unconnected with the trend of improving security in the technology, its time saving capacity and the fact that there is more education on usage now. In the same vain, there is a warmer attitude towards online banking among the Top/middle segment. The lower segment is almost oblivious of what online banking is.

Finally, it was discovered that it is more likely for a Top/middle segment individuals to have more than one account (70 percent of those in this segment have at least three) than for a Low segment individual. Marketers looking to increase their clientele base should take heed: conveying messages of better customer centric packages and more “less-educated people’s” products can win those in the Lower segment to your banks.

Some more recommendations
Since the cash-less economy project will effect major changes in the way money is spent in Nigeria (the challenge is accentuated by the level of illiteracy), it will naturally take some time to gain general acceptance. Indeed, a change of this magnitude should be preceded by a more aggressive public enlightenment campaign.

Though there have been attempts to drive the message across, our research indicates that information has not really tickled down to the grass root. Even those at the Top/middle segment do not fully understand how the policy benefits them. The CBN and other stakeholders should invest in creatively bridging this information gap. In time past, government sold ideas using jingles in various languages and through different media; why has that not been done here?

Then again, there should be adequate time between now and when the policy will be fully operational in the pilot cities. This will allow retail outlets deploy necessary technology, teach their staff and customers. The thinking that power supply will disrupt the implementation of this policy is rebuffed by our findings. It is clear that the policy is in the right direction; however, acceptance by the generality will determine its success or failure.

NOTE: In this research, Top/middle segment refers to highly educated individuals who have a minimum of HND education. In most cases these individuals are acquainted with and use the internet. The lower class is made up of those with lower educational qualifications.