MTN Nigeria Diversifies into Banking Sector and Obtains Final Approval for MoMo Bank

Telecommunications company MTN has received final approval from Nigerian regulators to operate a payment services bank, the mobile operator said in a regulatory filing on Monday.

“The start date will be communicated to the CBN (Central Bank of Nigeria) as per its requirements,” the telecom heavyweight said of the bank known as MoMo Payment Service Bank Limited in a note to the Stock Exchange. Nigerian.

The approval, the result of more than two years of waiting for the permit, gives the Johannesburg local unit, headquartered in MTN Group Limited permission to operate virtually all services offered by conventional commercial banks except for granting credit and processing foreign exchange transactions.

“We want to take advantage of the momentum of financial inclusion. We plan to give people who don’t have bank accounts or even ATM cards the ability to be able to do banking,” a senior telecom operator told PREMIUM time on the condition that his identity does not not be disclosed due to the sensitivity of the matter,” Nigeria’s Largest Company by income said.

“And we are betting on our size. When we have over 70 million subscribers spread across Nigeria through our infrastructural deployment, we are well positioned to cover everywhere. This is exactly what we want to achieve.

MTN Nigeria and Airtel Africa, which obtained preliminary approvals last November to operate in the same space, will seek to exploit Nigeria’s unbanked adult population of 38 million, who according to an Abuja-based media research house and the data analytics firm, held N26.2 trillion last year alone, a move that will pit the two telecom operators against traditional banks for market share.

Shares of the telecom company rose 0.34% to 12.19 WAT on Lagos Customs Street on Monday, trading at 206 naira per unit.

MTN’s large scale of broadband penetration gives both an open reach to rural Nigerians and urban areas without access to banking services through connectivity, a luxury that conventional banks cannot afford.

The ubiquity of telco coverage means that banking will no longer be the preserve of commercial lenders, a development that could position commercial lenders to take a big chunk of e-commerce revenue from conventional lenders at a time when most of banks are struggling to maintain their profits. growth.

For 2021, GTCO, Nigeria’s second largest lender by market value, saw earnings reaches its lowest level in four yearswhile rival UBA managed to scratch a 4.3% growth and Zenith 6.1%.

In December, MTN and Mafab won the tender for the 5G spectrum license auctioned by the Nigerian Communications Commission.

MTN Nigeria, which provides a third of MTN Group’s sales, saw its revenue soar to a record N1.7 trillion last year, with profit jumping 45.5% to N298.9 billion. naira.

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