EFFECT OF CASHLESS POLICY, SAVING AND BANK CREDIT ON NIGERIAN DEREGULATED ECONOMY

Abstract

This study examines the implications of cashless banking, with a view to exposing the
possible challenges and prospects it poses to the Nigerian economy as well as employing
aggregated approach. This study is important to Nigeria, where the idea of carrying raw
cash is normal, money laundering and illiteracy is on increase. It explicitly sought to find
out how cashless policy can mobilize and increase total domestic saving by increasing
bank credit of deposit money banks injected into the Nigerian economy, and their effect
on the country's economic growth as proxies by Gross Domestic Product. The
Autoregressive Distributed Lag model of econometric technique was used to analyze the
data. Our findings show that there exists a long run relationship among the variables
which simply suggest that cashless policy, savings and bank credit will influence economic
growth in Nigeria. bank credit and money supply to the domestic economy is positive and
significant.increased bank credit will increase considerably, supply of loanable funds
available through the banking system, thereby causing interest rate to fall. With lower
interest rate, total expenditure on investment usually increase, causing an increase in
employment rate and promoting the real GDP.The implication is that banks credit
impacted on the productive sectors sufficiently and significantly on the Nigerian
economy.