What does the CBN’s Cash-less policy mean for financial inclusion in Nigeria?
March 2013

Increasing numbers of countries have adopted policies to accelerate the use of electronic channels and reduce the use of cash. The motivations for these policies vary: many are primarily concerned with reducing tax evasion, some with fighting crime, and a few are now explicitly linked to financial inclusion – though the latter link is not necessarily immediately nor automatically achieved.

In Nigeria, the Central Bank of Nigeria (CBN) announced its Cash-less policy in 2011 and commenced a pilot of the policy in Lagos State in April 2012. The policy, intended to reduce the use of cash, is in fact a package of measures, with three key stated objectives:

  1. To drive the development and modernisation of the payment system in line with Vision 2020.
  2. To reduce the cost of banking services and drive financial inclusion by providing more efficient transaction options and greater reach.
  3. To improve the effectiveness of monetary policy in managing inflation and driving economic growth.

Financial inclusion is thus a distinct component of the CBN’s second Cash-less policy objective, in conjunction with reducing banks’ cost to serve.

So, how is the Cash-less policy relevant for financial inclusion in Nigeria; and how can its effect on financial inclusion be maximised? This report sets out the context of financial inclusion in Nigeria and considers evidence of the link between other countries’ approaches to reducing the use of cash and financial inclusion to answer these questions.

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