Effect of Cashless Banking on Unemployment Rate in Nigeria

Abstract

This study examined the effect of cashless banking on the unemployment rate in Nigeria, with a focus on the aggregate data of all the banks operating in the country as at 2012-2016, as documented in the CBN annual report. An ex-post facto research design was adopted for the study; and secondary source of data collection was employed. Cashless banking system as the independent variable of this study was measured with TATM, TPOS, TMPS and TIB, whereas the dependent variable was the Nigeria’s unemployment rate (UR). Data gathered were presented in tables and analysed using multiple regression technique (ordinary least square regression) of model estimation. In order to determine the overall significance of the model, students’ T-significance test was observed in the model (t-transformation of regression coefficient) and was used to test the hypothesis formulated. Results show that there is a negative and insignificant effect of cashless banking system on unemployment rate in Nigeria (β= -0.790, R2 = 0.624, t-2.233, p = 0.112). This means that cashless banking system in Nigeria does not contribute to the increased rate of Nigeria's unemployment as perceived by many people. Instead, more jobs are created for people expertise in operating the machines (ATM, POS, Internet and Mobile Phone) used in the cashless banking system. Based on the findings, it was recommended that Government and CBN should create awareness on the benefits derivable from shifting to cashless (cash-light) banking system in Nigeria, more especially on the fact that machines are not used to replace the workforce in a cashless banking system.