IIARD International Institute of Academic Research and Development

INTERNATIONAL JOURNAL OF ECONOMICS AND FINANCIAL MANAGEMENT (IJEFM )

E-ISSN 2545-5966
P-ISSN 2695-1932
VOL. 9 NO. 9 2024
DOI: 10.56201/ijefm.v9.no9.2024.pg43.52

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Cashless Policy and Capital Growth of Micro Medium and Small- Scale Enterprises (MSME) in Rivers State Nigeria

Dennis Brown Ewubare & Godwin Dave Odu

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Abstract

This study examines the contributions of cashless policy to the development of Micro, Small and Medium-Scale Enterprises (MSMEs) in Rivers State. This was motivated by the growing transition from traditional banking practices to FinTech where cashless payment options are prioritized to foster the growth and development of businesses including MSMEs. The cashless policy was measured using cheques, ATMs, POS, mobile payment and online banking services. On the other hand, the development of MSMEs was measured using capital growth, increased sales, profitability, customer satisfaction and job creation. The primary data required for this study were obtained from a survey of 419 MSMEs and 411 customers using a well-structured questionnaire. The data analysis techniques comprised descriptive statistics, mean ratings and ordered logit regressions. The ordered regression results showed that the use of cheques does not significantly increase the probability of reporting capital growth, among the MSMEs in the study. The results further showed the use of ATM cards significantly increased the probability of reporting capital growth by 1.88%. This highlights the effectiveness of ATMs as a dominant cashless policy initiative in fostering MSME development. At the same time, the results showed that POS services significantly increased the probability of reporting capital growth by 1.0%. In addition, the results showed that mobile payment options significantly increased the probability of reporting capital growth, by 3.29%. Based on the findings, this study concludes that the cashless policy initiatives in the form of ATMs, POS services and mobile payment options are germane to the development of MSMEs in Rivers State. Thus, this study recommends that the Rivers State Government should synergize with deposit money banks to increase the availability of ATM terminals while enlightening MSMEs on the need for the adoption of ATM cards to improve th

keywords:

Cashless policy, mobile payment, online banking, MSMEs and ATMs

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