By Emmanuel Nduka
The Central Bank of Nigeria (CBN) has granted approval in principle to MTN Nigeria Communications Plc to operate MoMo Payment Service Bank Ltd, its payment service bank (PSB).
MTN Nigeria disclosed this in a regulatory filing with the Nigerian Exchange Ltd on Friday, citing that this is the first step in a long process that would lead to an eventual approval.
With the agreement, MTN Nigeria would be required to fulfil a number of conditions, even as “the decision to issue a final approval is firmly within the regulatory purview of the CBN” the telecommunications company said.
Expressing optimism that it would eventually get the PSB license, MTN Nigeria reaffirmed its commitment to the financial inclusion agenda of the CBN in Nigeria.
MTN and other non-financial companies have long been awaiting their PSB licenses since the Nigerian Government first announced its willingness to issue them in 2018.
While telecom companies like MTN and Airtel looked forward to taking advantage of the more than 60 million Nigerians who are estimated to be financially excluded, by providing them access to financial tools, the development is a first step in a major financial revolution.
Experts have blamed Nigerian banks for trying to prune the plan, out of worry of what it would mean for their operations. But despite the delay, the telecom companies have waited patiently.
Last year, the former CEO of Airtel Africa, Raghunath Mandava, noted that the license would “dramatically change financial inclusion in the country.”
In order to operate a PSB in Nigeria, one of the conditions is to meet a minimum capital requirement of $12.2 million (N5 billion). This is a condition MTN Nigeria could easily meet, seeing as its parent company reported a 19.1 percent revenue growth to $8.2 billion in Q3 of this year.
