MTN gets approval to operate payment service bank

MTN Nigeria Communications Plc announced that it has obtained an Approval-in-Principle (AIP) from the Central bank of Nigeria (CBN) to launch its proposed MoMo Payment Service Bank Limited.

The approval is one of the foremost actions required to obtain final approval from the apex banking authority, subject to the fulfilment of other stipulated conditions.

The announcement was made through a press release dated 5th of November 2021, acknowledged by the Company’s Secretary, Uto Ukpanah, and filed with the Nigerian Exchange Limited (NGX).

Excerpts of the recent press release reads: “MTN Nigeria Communications Plc (MTN Nigeria) as promoter, received an Approval in Principle (AIP) dated 4 November 2021 from the Central Bank of Nigeria (CBN) for a licence application for the proposed MoMo Payment Service Bank Limited.’’

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Recall that MTN Nigeria has never hidden its desire to become a full-fledged financial services platform. Two years ago, the telecommunications giant launched its mobile money transfer service called MoMo Agent Network. The launch was part of an ambitious move by the teleco to replicate in Nigeria what Safaricom’s M-Pesa did in Kenya. The product launch is sequel to the obtaining of a super-agent license by the teleco to provide banking services.

Similarly, the teleco giant affirmed that the recent move is a demonstration of its commitment towards the financial inclusion agenda of the CBN and the Federal Republic of Nigeria, and that it will continue to explore means whereby it can contribute to its fulfillment.

Analysts believe that the entrance of MTN into the Nigerian financial services space will heighten competition especially with commercial banks and Fintechs. Nevertheless, competition is necessary to drive financial inclusion through the provision of diverse and heterogeneous financial services to the unbanked population.