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MEDIATING ROLE OF CENTRAL BANK OF NIGERIA’S REGULATIONS ON THE AGENT BANKING AND MOBILE PAYMENT SUSTAINABILITY STRATEGIES IN NIGERIA
Abstract
The study explores the mediating role of CBN’s regulations on the agent banking andmobile payment sustainability strategies in Nigeria. The arguments are that agent banking decomposed as separation of ownership and control; risk preference; information asymmetry and moral hazards would enhance the sustainability of the strategies in some cases but would enhance it better if there were regulations. To this effect, an electronic survey was carried out via WhatsApp on a total of 745 registered agent banks in Ebonyi State, Nigeria. Only 268 registered agent banks responded to the questionnaire, and the data gathered were analyzed using the Hayes’ mediation model. The findings indicated that separation of ownership and control enhances the sustainability of the strategies (β = 0.169); information asymmetry enhances the sustainability of the strategies as well (β = 0.319); risk preference does not enhance the sustainability of the strategies (β = -0.114) and moral hazards do not enhance the sustainability strategies as well (β = -0.106). However, when combined with regulations, there were improvements in the effects: separation of ownership and control and sustainability through regulations (c1= 0.305); information asymmetry and sustainability through regulations (c3= 0.339); risk preference and sustainability through regulations (c2= -0.197); and moral hazard and sustainability through regulations (c4= -0.179). The paper recommends that commercial banks should to adopt policies that reduce risk preference and moral hazards, agent banks should maintain separation of ownership and control and information asymmetry, while the CBN must continue to regulate and provide favorable policies to support agent banking in Nigeria.
Keywords: Agent Banking, Mobile Payment Sustainability, Regulations, financial inclusion.