IMPACT ON MOBILE BANKING ON FINANCIAL INCLUSION IN NIGERIA

CHAPTER ONE

1.1 Introduction

Financial inclusion generally refers to people being able to get access to the formal financial institutions. Individuals are classified as financially included when they have or use a formal financial product or service. Mobile banking is a typical application in the mobile financial field. It refers to the integration of electronic money and mobile communication services through multi-industry and multiplatform cooperation between mobile telecom carriers and banking institutions (Sun et al., 2017). The mobile banking technology is to address the problems related to bricks and mortar banks, thus queuing, and travelling over a long distance in most cases to carry out simple banking service such as checking of balance, withdrawal and transfers of money. Therefore, mobile payments offer a universal payment solution, thus delivering distinctive value to both consumers and merchants (Mallat, 2007).

As a prelude to other parts of this study, this chapter will discuss the background upon which this study was initiated, the statement of problems that led to this study, the Aim and Objectives of the study. Others are Significance of the study, Scope of work, Research hypothesis and questions, Limitations of the Study and Definition of technical terms.

1.2 Background of Study

The recent evolution of technology for financial transactions poses interesting questions for policy makers and financial institutions regarding the suitability of current institutional arrangements and availability of instruments to guarantee financial stability, efficiency and effectiveness of monetary policy. The Advent of mobile banking constitutes a recent development in electronic banking. It facilitate the access of customer account balance, transfer of funds, SMS services , payment transaction and other businesses services through the use of mobile phones (Saleem & Rashid, 2011). The advantages attributed to the use of mobile phones include convenience derived in conducting transaction with ease anywhere, anytime. It also provides the needed security in conducting banking transaction. According to the Federal Reserve survey mobile banking is the process of using a mobile phone to conduct banking transaction such as having access to your bank account, credit card account, or other financial account.

The service can be accessed from the bank’s web, using an application downloaded to the mobile phone”, the web browser on customers mobile phone or by text messaging. The services offered include cash depositing, cash withdrawals and transfers, balance inquiry and statement of account (Jepleting et al., 2013). Mobile banking helps the bank to send messages across to all of its clients with ease and maintain good customer relationship and generate data from customers.

According to CBN, the new cashless policy was introduced for a number of key reasons, including, To drive development and modernization of our payment system in line with Nigeria‘s vision 2020 goal of being amongst the top 20 economies by the year 2020. An efficient and modern payment system is positively correlated with economic development, and is a key enabler for economic growth. To reduce the cost of banking services (including cost of credit) and drive financial inclusion by providing more efficient transaction options and greater reach and to improve the effectiveness of monetary policy in managing inflation and driving economic growth. In addition, the cash policy aims to curb some of the negative consequences associated with the high usage of physical cash in the economy, including: high cost of cash: high risk of using cash, high subsidy, informal economy and inefficiency & corruption (CBN, Website, 2011). Regarding this context, the study seeks examine the cashless economy by exploring its impact on the Nigerian economy.

Financial inclusion is thus distinct component of the CBN’s second Cashless policy objective, in conjunction with reducing banks’ cost to serve. However, other than the implicit assumption that lower banking costs will make banking services more affordable, the initial policy measures do not immediately appear to directly drive financial inclusion. For instance, the current threshold for cash deposits and withdrawals above which individuals must pay a fee, set by the CBN at N500, 000.00 per day, is several times the annual income of most Nigerians, so that few individuals have been directly affected by it. Not surprisingly, a representative survey of customers in Lagos found that fewer than 6% had deposited or withdrawn over this amount since the policy went into effect (National Financial Inclusion Strategy, 2012).

Therefore, in Nigeria where the research was carried out, the activities that was conducted is to know the Impact on Mobile Banking on Financial Inclusion.

1.3 Statement of Problems

Investigation revealed that in Nigeria today, infrastructure is a major problem that hinders the money deposit banks from attaining full potential in terms of certain policy implementations and its impact on financial transactions in the banking industry. The infrastructure in Nigeria over the years has not been reputable and thus has given way to ineffectiveness to the sincerity in financial transactions in the banks. The level of technology in the nation is rather poor and increasing at a slow pace and as such hasn’t given room for major development and policy implementations that may have risen.

The technology available for carrying out banking transactions are not as effective as they ought to be therefore leaving people with no other choice than to keep cash in their houses in order to avoid having to spend lots of time in the banking halls due to low servers, interrupted power supply, bad internet services. Illiteracy and the low level of education of people does nothing else than leave people in the dark and therefore results into the inability of the people to understand when developments are being put into place. Many people do not see the need to keep their money in the banks or invest them due to the lack of understanding they have and also insufficient publicity and awareness measures are what have being in existence which if dealt with would at least reduce the lack of understanding of many and make them see viable reasons why they should keep their money in the banks and invest them other than keep them in their houses as a route to the safety of many lives and better growth of the economy and as such increase the standard of living.

1.4 Aim and Objectives of Study

The aim of the study is to examine the Impact on Mobile Banking on Financial Inclusion in Nigeria. In achieving this aim, the following specific objectives were laid out as follows:

To determine the degree of the relationship between mobile banking and Nigerian economy;
To examine the effects of accessibility of payments infrastructure on financial inclusion;
To investigate the electronic channels effects of awareness on financial inclusion;
To assess the effects of using enhanced formal financial services on financial inclusion; and
To examine the effects of change in business models of financial service providers on financial inclusion.

1.5 Research Questions

The study came up with research questions so as to be able to ascertain the above stated objectives. The specific research questions for the study are stated below as follows:

What is the degree of the relationship between mobile banking and Nigerian economy?
What are the effects of accessibility of payments infrastructure on financial inclusion?
What are the electronic channels effects of awareness on financial inclusion?
What are the effects of using enhanced formal financial services on financial inclusion?
What are the effects of change in business models of financial service providers on financial inclusion?

1.6 Research Hypothesis

In order to pursue the objective of this study, the following generalized statements have been designed to guide and aids in obtaining the result for the experiment to be conducted. For this work, the null hypothesis will be represented with H0 while the alternative hypothesis will be represented with hypothesis H1.

Hypothesis One

H0: Mobile banking does not relate to the Nigerian Financial Inclusion.
H1: Mobile banking relate to the Nigerian Financial Inclusion.

Hypothesis Two

H0: Mobile banking has no effect on the Nigeria economic growth.
H1: Mobile banking has effect on the Nigeria economic growth.

1.7 Significance of Study

This study will be of immense benefit to the following persons:

It would add the new knowledge generated to the existing knowledge of the researcher.
It will also assist bankers, business analysts and policy makers on monetary policy formulation and effective decision making.
It will help the general public who may have time to go through the findings and recommendations of this study to gain knowledge as regard to the benefits and challenges of introducing the policy in Nigerian economy.

1.8 Scope of Study

The scope of the research is focused on the Impact on Mobile Banking on Financial Inclusion in Nigeria.

1.9 Limitations of the Study

During the course of this study, many things militated against its completion, some of which are:

Time Constraint: The time frame given to accomplish this project was very short due to school academic calendar and it was carried out under pressure which made the researcher not to implement some necessary features.
Research material: availability of research material is a major setback to the scope of the study.
Frequent power failure: This made the researcher append more money on fuel to ensure sustainable power.

…

CHAPTER TWO

2.0 Literature Review

2.1 Introduction

The review of relevant literature is the main topic of this chapter. A literature review covers theoretical and methodological contributions to a certain issue in addition to the state of knowledge at the time of writing. It provides information about the state of the art in relation to the subject you are writing about. It examines the body of work on the chosen subject. The literature evaluation in this study comprises the …

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TABLE OF CONTENTS
PRELIMINARY PAGES

Title page
Approval page
Dedication
Acknowledgement
Table of Contents
Abstract
CHAPTER ONE
INTRODUCTION
1.1 Introduction
1.2 Background …
⋮
CHAPTER TWO
LITERATURE REVIEW
2.1 Introduction
2.2 Conceptual Review
2.3 Theoretical Framework
⋮
2.4 Empirical Studies
2.5 Research Gaps
2.6 Summary of Literature Review
CHAPTER THREE
RESEARCH METHODOLOGY
3.1 Introduction
3.2 Research Design
3.3 Population of Study
3.4 Sampling and Sampling Technique
3.5 Validation of Research Instrument
3.6 Method of Data Collection
3.7 Method of Data Analysis
3.8 Questionnaire Administration
3.9 Ethical Consideration
3.10 Statistical Analysis
CHAPTER FOUR
DATA ANALYSIS, RESULT AND DISCUSSION
4.1 Introduction
4.2 Presentation and Analysis of Data
4.3 Re-statement of Research Questions
4.4 Test of Hypotheses
4.5 Discussion of Findings
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATION
5.1 Introduction
5.2 Summary of Findings
5.3 Conclusion
5.4 Recommendation
5.5 Suggestion for Further Study
REFERENCES
APPENDIX A - “QUESTIONNAIRE”

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