MTN Nigeria and Airtel Africa Plc have received approval in principle to operate payment service bank (PSB) in the country.
The two leading telcos disclosed in via filings on the Nigerian Exchange Limited (NGX) on Friday morning.
PSB operators provide financial services through digital means to low-income earners and people that do not use banks or banking institutions for transactions.
Airtel said it will operate PSB via its Smartcash Payment Service Bank Limited while MoMo Payment Service Bank Limited will be MTN’s PSB. The essence is to bring more people into the financial inclusion space
Segun Ogunsanya, CEO, Airtel Africa, said, “I am very pleased that Smartcash has been granted an approval in principle to operate a service bank business in Nigeria. We will now work closely with the Central Bank to meet all its conditions to receive the operating licence and commence operations.
“The final operating licence will enable us to expand our digital financial products and reach the millions of Nigerians that do not have access to traditional financial services. I am looking forward to working closely with the Government, the Central Bank and traditional financial institutions to expand financial inclusion and meet the evolving needs of our customers and the economy.”
Uto Ukpanah, company secretary at MTN Nigeria, said, MTN Nigeria remained optimistic that it would eventually get the PSB licence.
According to the regulatory filing seen by Business Metrics, “This is the first step in a long process that would lead to eventual approval. In other words, 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 statement reads.
“MTN Nigeria expressed optimism that it would eventually get the PSB license, and reaffirmed its commitment to the financial inclusion agenda of the CBN in Nigeria.”
However, the final approval is subject to the Group satisfying certain standard conditions within six months and final approval by the Central Bank of Nigeria.
WHAT THIS MEANS
The approval would allow the big telecoms operators to leverage on their customer base and digital infrastructures to deploy payment services in country and thus, contribute to the staggering financial inclusion drive of the country.
Particularly, the licences are timely given the need to further drive financial inclusion in the country. According to EFInA, about 36 per cent of the adult population, representing 38 million citizens, do not have access to financial services in Nigeria.
Simiarly, financial inclusion in the country seem to have been stifled further by incessant closure of bank branches and Automated Teller Machine (ATM) terminals.
For instance, the International Monetary Fund (IMF) made shocking disclosure earlier this week that Nigerian banks closed 234 branches and 649 Automated Teller Machines (ATMs) in 2020.
MTN, Airtel get approval to operate payment service bank