CASHLESS POLICY AND SME PERFORMANCE IN NIGERIA: THE GAINS, CHALLENGES AND CONSEQUENCES FOR SMES IN LAGOS STATE
Keywords:
cashless policy, SMEs, financial performance, operational efficiency, Lagos State, NigeriaAbstract
This study examined the impact of the cashless policy on the performance of Small and Medium Enterprises (SMEs) in Ojo District, Lagos State, Nigeria. Specifically, it investigated the effects of cashless payment systems on SMEs’ financial performance, operational efficiency, perceived benefits, challenges, and unintended consequences. The study adopted a descriptive survey research design, and primary data were collected from 50 SME owners and managers through structured questionnaires. Data were analyzed using descriptive statistics, including frequency counts, percentages, and mean scores. The findings revealed that the cashless policy has positively influenced SMEs by improving transaction speed, enhancing financial transparency, reducing excessive dependence on physical cash, and expanding customer reach through digital payment options. However, the study also found that poor network connectivity, high transaction charges, limited digital literacy, cybersecurity risks, and failed transactions continue to limit the effectiveness of cashless payment systems among SMEs. In addition, unintended consequences such as delayed payment confirmation, customer dissatisfaction, and occasional loss of sales were identified. The study concluded that the cashless policy has the potential to support SME growth and improve business operations in Ojo District. However, its full benefits can only be realized when infrastructural, technological, and systemic challenges are addressed. The study recommended improved digital payment infrastructure, reduced transaction charges, stronger cybersecurity measures, increased financial literacy, and better support from banks and payment service providers.References
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