MTN Nigeria, the Nigerian arm of Africa’s largest telecom, today received final approval from the Central Bank of Nigeria to run a payment service bank.
With this approval, MTN Nigeria can provide virtually all the services offered by conventional commercial banks with the exception of granting credit and processing foreign exchange transactions.
This announcement follows a previous approval in principle granted in November 2021, to Airtel Africa Plc and MTN Nigeria Communications Plc to operate a payment service bank in the country. The final approval was subject to the fulfilment of certain standards of the conditions within six months. This hints that, while MTN has gotten its own approval, Airtel Nigeria could be getting its own soon.
Despite being home to Africa’s largest unbanked population, Nigeria has not witnessed the same exponential growth in mobile money adoption and lags behind its regional peers like Ghana and Kenya when it comes to penetration. In January, MTN revealed that MTN Nigeria’s mobile money service had attracted 9.4 million active users since launching in August 2019.
This approval is expected to spur the adoption of mobile money in Nigeria as the use cases increase. The widespread coverage of MTN will help it serve people all over the country, especially in rural areas and also position the telecom giant as a competitor for the market share and earnings of commercial lenders.
MTN Nigeria, which provides one-third of the MTN Group’s sales, saw revenue climb to a record ₦1.7 trillion ($3.4 billion) last year, with profit leaping 45.5% to ₦298.9 billion ($598 million). Mobile money is a growing contributor to MTN Nigeria’s income, and it’s expected that the new banking licence would allow the company to explore growth opportunities presented by the Nigeria’s unbanked population.