Leading telecom operators in Nigeria, Airtel Africa and MTN Nigeria, have each received approval-in-principle from the Central Bank of Nigeria to operate a payment service bank business in the country to drive financial inclusion across income groups in every community.
The approval-in-principle for the service bank license is a step toward a final approval, which is subject to the telecom companies satisfying certain standard conditions within six months for the proposed payment service banks.
According to the regulatory filing issued by the behemoths, MTN Nigeria proposed its Mobile Money Payment Service Bank, while Airtel Africa proposed its subsidiary Smartcash Payment Service Bank Limited to the Central Bank of Nigeria.
Final approval will place their banking subsidiaries in the same market segment as leading banks in Nigeria such as Zenith Bank, First Bank, United Bank for Africa, Access Bank and Guaranty Trust Bank, as well as fintech companies like PayStack, Flutterwave, Paga and Piggyvest.
In addition to providing quality financial services to those with financial access in the country, the telecom operators are expected to extend that access to underserved communities and income segments in Nigeria.
Airtel Africa CEO Segun Ogunsanya stated that the approval-in-principle issued to Smartcash will give the telecom company an opportunity to work with the Central Bank of Nigeria as it moves to meet all the requisite conditions to receive an operating licence.
He added that the licence will enable the telecom operator to expand its digital financial products and reach the millions of Nigerians who do not yet have access to traditional financial services. This will support the evolving needs of customers and the economy at large, he said.
MTN Nigeria is one of Nigeria’s largest telecommunications services providers, connecting approximately 68 million people in communities across the country.
In the first nine month of 2021, the telecom service provider led by CEO Karl Toriola reported a 23.7-percent increase in revenue to N1.204 trillion, while its fintech revenue led by a subscriber base of 6.6 million increased by 55.2 percent.
While Airtel Africa reported a 25.2-percent increase in revenue to $2.27 billion in the first half of its 2022 financial year, its mobile money subsidiary reported a 42-percent increase in revenue.