Abstract

The study examined cashless policy and performance of deposit money banks in Nigeria
from 2008-2021.Using descriptive research design and multiple regression, data on
automated teller machine point of sale, mobile banking and point of sales as independent
variable and return on asset as dependent variable were collected from Central Bank of
Nigeria (CBN) statistical bulletin and annual report of selected deposit money banks of
various years. The study revealed that there exist positive and significant relationship
between automated teller machine and mobile banking and return on asset. On the other
hand, point of sales does have negative and insignificant relationship to return on asset.
The study concludes that the positive result of the predictor variables means that it has
the potential to influence total return on asset effectively. The study recommends Nigeria
deposit banks should give more priority to operations and services that will contributes
to return on asset. Again, banks attention should pay more attentions to electronic
banking as it serves as key element of strengthening the competitiveness of the nation’s
economy and productivity.
 CHAPTER FOUR

PRESENTATION AND ANALYSIS OF DATA

This chapter deals with the presentation and analyses of the results of data

computed in the econometric review tests results. The data presented are

analyzed in accordance with the model formulated and finally the findings

are discussed in the same order.

4.1 Data Presentation

The data for cashless policy and performance of deposit money banks in Nigeria

analysis relates to values for automated teller machine (ATM), mobile banking

(MB), Point of sales (POS) and return on asset (ROA) for the period 2008 to

2021. The source of the data was Central Bank of Nigeria (CBN) statistical

bulletin and Annual report of selected deposit money banks (Union Bank Plc) of

various years.
Table 4.1: Summary of Annualized data on automated teller machine (ATM),
mobile banking (MOB), point of sales (POS) and return on asset (ROA)
selected deposit money bank respectively.

YEAR ATM MOB POS ROA

N’Billions N’Billions N’Billions N’Billions
2008 275 320 250 7,507

2009 342 280 310 9,275

2010 199 195 255 9,342

2011 220 140 320 13,862

2012 234 263 280 92,852

2013 258 325 250 94,308

2014 362 355 248 12,4199

2015 275 120 210 15,8727

2016 342 310 255 16,6753

2017 373 182 320 17,5125

2018 356 350 280 10,5663

2019 246 330 195 12,4252

2020 343 177 285 17,3791

2021 422 305 310 19,3424

Source: CBN bulletin and annual report of selected deposit money banks of various years.
Sequel to the aforementioned table, cashless policy proxied automated teller

machine, mobile banking, point of recorded increased and decreased in

billions from year to year in which automated teller machine have average

value of N272 billions in year 2015 and maximum value of N422 billions in

2021 while the least value was N190 billions in 2010. Mobile banking has a

dynamic value for the period under review with an average of N263 billions

in 2013, with maximum value of N355 billions in 2014, while the least

value was N120 billions in 2015. The table shows that point of sales have

average value of N210 billions in 2012 and recorded her maximum value in

2017 with total of N320 billions, having its least value in N195 billions in

2019. Relatively, return on asset experience have its maximum value

N94,308 billions in the year 2013, while ROA recorded its average value of

N7,507 billions in 2008. The table shows that cashless policy measures

shares a significant proportion of return on assets of deposit money bank in

Nigeria during the time of the study.

Empirical Results

The empirical analysis of data for this research is carried out under the
following:
i. Unit Root Test
ii. Multiple Regression analysis
Unit Root Test
The Augmented Dickey-Fuller (ADF) unit-root test was employed to test for

stationarity or the existence of unit roots in the data. The results of the unit-

root tests are presented below:

Table A: Summary of Unit Root Test results

Variables ADF-Statistic Critical Order of Int.
Value
1% 5% 10%
ROA -5.394077 -2.957110 -0.183246 -2.954021 1(1)
ATM -4.395043 -2.957110 0.056414 -2.954021 1(1)
MOB -4.136575 -2.957110 0.417036 -2.954021 1(1)
POS -5.247791 -2.957110 1.880315 -2.954021 1(1)
Source: Author’s compilation using E-views 7 Output.

The Augmented Dickey Fuller (ADF) unit root test for unit root of variables

is shown in table above. The unit root test results give the test statistics and
critical values at 1%, 5% and 10% level of significance for each variable

tested.

From the table above, the unitary root test for return on asset, automatic teller

machine, mobile banking and point of sales indicates that they are stationary

at first difference. Hence, this study further applied the unit root tests at the

first differences for the four variables. A stationary series was obtained for all

the variables at first difference. This shows the possibility of the existence of

long run relationship between the variables. Thus, we can now proceed to the

second stage of testing for the long run relationship among the chosen

variables.
Equation Estimation Result

Dependent Variable: ROA

Method: Least Squares
Date: 5/3/23 Time: 02:42
Sample: 2008 2021
Included observations: 13
Variable Coefficient Std. Error t-Statistic Prob.  

C 0.132555 0.188180 1.828124 0.5551

ATM 1.052287 0.054719 4.534001 0.0702
MOB 1.086454 0.121009 8.317083 0.0720
POS -1.007244 0.238727 -4.533897 0.0370
MTI -0.767537
R-squared 0.851155    Mean dependent var 3.183448
Adjusted R-squared 0.822371    S.D. dependent var 2.137065
S.E. of regression 1.197313    Akaike info criterion 3.353622
Sum squared resid 34.40540    Schwarz criterion 3.589363
Log likelihood -43.62752    Hannan-Quinn criter. 3.427453
F-statistic 3.146945    Durbin-Watson stat 1.647620
Prob(F-statistic) 0.011237

Source: Eviews Printout

The E-view 7.0 statistical package was used in the equation estimation
process and result is presented in table 4.2 above. The R2 is otherwise known
as the measure of “goodness of fit” or the coefficient of determination”. It
shows the percentage of the total variation of our dependent variable (Y) that
can be explained by the independent variables ( X1, X2, and X3). Therefore, the
R2 is expressed as a percentage, and the part of the variation of the dependent
variable (i.e 100- R2) which is not explained by the regression line is

attributed to the existence of the disturbance term (et).

The R2 gives 0.853603 or 85.4% meaning that the variations in the

dependent variables i.e return on asset (ROA) is 85.4% attributable to the
changes in the independent variables, automated teller machine (ATM),
mobile banking (MOB) and Point of sales (POS) respectively.

Coefficient of determination (R2): The R-square measures the goodness of

fit which is 0.822371. It shows the percentage of the total variations in the

dependent variable that is explained by the independent or explanatory

variable.
T-Test: This is used to test the validity of the parameter estimate. In other

words, it is used to decide whether the estimate (independent variable) is

significant or not.

F-Test: The F-test follows the F-distribution at 5% level of significance. It is

therefore used to find out whether the overall parameter is significant or not.

Probability

This probability is also known as the p-value or the marginal significance

level. Given a p-value, you can tell at a glance if you reject or accept the

hypothesis that the true coefficient is zero against a two-sided alternative that

it differs from zero. A probability lower than .05 is taken as strong evidence

of rejection of that hypothesis.

The DW (Durbin-Watson) as shown in the regression is 1.647620 and

below the traditional benchmark of 2.0 which shows that there is a possibility
of positive serial correlation.
From the table 4.2, the beta coefficient representing the relationship between
automated teller machine (ATM) and return on asset (ROA) is 1.052297,
while observed t-statistic is 4.534001 which is insignificant at 5% level (prob.
= 0.0702). Given these, we do reject the null hypothesis of no significant
relationship between ATM and ROA in the short run. The observed
relationship is positive and significant which is not in line with a priori
expectation.

Relatively, the observed relationship between mobile banking (MOB) and

return on asset (ROA) is positive and statistically insignificant at 5% level
(Beta = 1.086454; t-stat 8.317083; prob. = 0.0720). Thus, we do reject the
null hypothesis of no significant relationship between MOB and ROA in the
short course. The relationship is positive and significant which aligned with a
priori expectation.

The beta coefficient representing the relationship between point of sale (POS)
and return on asset (ROA) is -1.007244, while observed t-statistic is -
4.533897 which is insignificant at 5% level (prob. = 0.0370). Given these, we
do not reject the null hypothesis of no significant relationship between POS
and ROA in the short run. More so, the observed relationship is negative and
insignificant following the result which is not in conformity to a priori
expectation.

4.3 Test of Hypotheses

The earlier formulated hypotheses in this study shall be tested using the
observed beta coefficient and calculated T-statistics for the short run.

Hypothesis one
Ho1: There is no significant relationship between automated teller
machine and return on asset.
From the regression result in table 4.2, the calculated (t-value is 1.052287;

prob. = 4.534001), it is significant at 5% level, we do reject the null

hypothesis of no significant relationship and thus conclude that automated

teller machine does have a positive and significant relationship with return on

asset within the period under study and the positive sign is in agreement with

our a priori expectation.

Hypothesis Two

Ho2: There is no significant relationship between mobile banking and

return on asset.

The regression result in table 4.2 above, indicate a beta coefficient of

1.086454; t-value = 8.317083 as relationship between mobile banking and

return on asset, it is significant at 5% level, thus we do reject the null

hypothesis and thus conclude that mobile banking does have a positive and

significant relationship with return on asset during the period under study in

the short while. The positive sign is in conformity to the expected a priori.
Hypothesis Three

Ho3: There is no significant relationship between point of sales and

return on asset.

Based on regression result in table 4.2, calculated beta coefficient is -

1.007244; t-value is -4.533897 is insignificant at 5% level, we do not reject

the null hypothesis and thus conclude that point of sales does have a negative

and insignificant relationship with return on asset during the period under

study in the short while. The negative sign is in disagree with the expected a

priori.

From the E-Views 7 regression analysis carried out and the computed t-

value, regression coefficient and 0.5 percent critical probability value; we

therefore reject the null hypothesis, that there is significant relationship

between automated teller machine, mobile banking and return on asset in

banks in Nigeria.

From the foregoing, it can be deduced that;

 Automated teller machine exhibits positive and significant short-run

relationship on return on asset as at the time of the study.

 Mobile banking exhibits positive and significant short-run relationship on

return on asset during the period of the study.

 Point on sales has negative and significant relationship on return on asset

during the period of the study.

 The regression output indicated that there is significant relationship

between cashless policy and performance of deposit money banks in

Nigeria. Based on the above findings, the result shows that two of the

employed variables adhered to apriori expectations by exhibiting positive

signs except point of sale that shows negative sign.

 CHAPTER FIVE

DISCUSSION, CONCLUSION AND RECOMMENDATION

5.1 Discussion of Findings

A detailed investigation has been conducted on the study; cashless policy and

performance of deposit money banks in Nigeria for the period 2008 to 2021. The

study analytically indicates that automated teller machine and mobile banking

does have positive and significant relationship with return on asset.

Relatively, point on sales is negative because of the coefficient -1.007244 and

t-stat -4.533897 of the independent variables.

Notwithstanding, more than a few studies have examined cashless policy and

performance of deposit money banks in Nigeria in several periods and locations.

Akpan, (2005) used econometric approach to examine the relationship

between automated teller machine and return on assets, considered in his

analysis were electronic mobile and automated teller machine. The study

found significant relationship between automated teller machine and the

dependent variable.

Ighoroje and Okoroyibo (2020) examined cashless policy and the

performance of Nigerian deposit money banks. The study found that both
mobile banking had a positive and significant with return on asset. He

concluded that mobile banking impacts positively on the return on asset.

Andabai and Bina (2019) examined the relationship between point of sale and

return on asset, he used the Ordinary Least Squares (OLS) technique to see

and how point of sales does not significant relationship with return on sale.

5.2 Conclusion

This study has been resourcefully evaluated and cashless policy and

performance of deposit money banks in Nigeria using regression model for

the period 2008-2021. The observed results revealed that automated teller

machine and mobile banking exerts a positive and significant influence on

return on asset on selected bank in Nigeria. The variations in the dependent

variables i.e return on asset is 0.853603 or 85.4% % which is attributed to the

changes in the independent variables respectively. Therefore, on the basis of the

study findings, the following conclusions are drawn:

 The study concludes that automated teller machine does have positive and

significant effect on return on asset of selected bank in Nigeria.

 The study concludes that mobile banking does have positive and

significant effect on return on asset of selected bank in Nigeria.

 Operations and services especially automated teller machine and mobile

banking positively affect the income generation capacity of banks which is

relatively increase return on asset.

5.3 Recommendations

Based on the findings, the following recommendations are made:

 Nigeria deposit banks should give more priority to operations and services

that will contributes to return on assets.

 Active sensitization should be encouraged among the system and

individuals in the economy.

 Banks attention should pay more attentions to cashless policy as it serves

as key element of strengthening the competitiveness of the nation’s

economy and productivity.

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 APPENDIXES
Table 4.1: Summary of Annualized data on automated teller machine (ATM),
mobile banking (MOB), point of sales (POS) and return on asset (ROA)
selected deposit money bank respectively.

YEAR ATM MOB POS ROA

N’Billions N’Billions N’Billions N’Billions
2008 275 320 250 7,507

2009 342 280 310 9,275

2010 199 195 255 9,342

2011 220 140 320 13,862

2012 234 263 280 92,852

2013 258 325 250 94,308

2014 362 355 248 12,4199

2015 275 120 210 15,8727

2016 342 310 255 16,6753

2017 373 182 320 17,5125

2018 356 350 280 10,5663

2019 246 330 195 12,4252

2020 343 177 285 17,3791

2021 422 305 310 19,3424

Source: CBN bulletin and annual report of selected deposit money banks of various years.
Table A: Summary of Unit Root Test results
Variables ADF-Statistic Critical Order of Int.
Value
1% 5% 10%
ROA -5.394077 -2.957110 -0.183246 -2.954021 1(1)
ATM -4.395043 -2.957110 0.056414 -2.954021 1(1)
MOB -4.136575 -2.957110 0.417036 -2.954021 1(1)
POS -5.247791 -2.957110 1.880315 -2.954021 1(1)
Source: Author’s compilation using E-views 7 Output.
Equation Estimation Result

Dependent Variable: ROA

Method: Least Squares
Date: 5/3/23 Time: 02:42
Sample: 2008 2021
Included observations: 13
Variable Coefficient Std. Error t-Statistic Prob.  

C 0.132555 0.188180 1.828124 0.5551

ATM 1.052287 0.054719 4.534001 0.0702
MOB 1.086454 0.121009 8.317083 0.0720
POS -1.007244 0.238727 -4.533897 0.0370
MTI -0.767537
R-squared 0.851155    Mean dependent var 3.183448
Adjusted R-squared 0.822371    S.D. dependent var 2.137065
S.E. of regression 1.197313    Akaike info criterion 3.353622
Sum squared resid 34.40540    Schwarz criterion 3.589363
Log likelihood -43.62752    Hannan-Quinn criter. 3.427453
F-statistic 3.146945    Durbin-Watson stat 1.647620
Prob(F-statistic) 0.011237

Source: Eviews Printout