MTN Nigeria, the Nigerian arm of Africa’s largest telecom, today received final approval from the Central Bank of Nigeria to operate a payment services bank.
With this approval, MTN Nigeria can provide virtually all services offered by conventional commercial banks with the exception of extending credit and processing foreign exchange transactions.
This announcement follows a previous authorization in principle granted in November 2021, to Airtel Africa Plc and MTN Nigeria Communications Plc to operate a payment services bank in the country. Final approval was conditional on meeting certain standards of conditions within six months. This hints that while MTN got its own endorsement, Airtel Nigeria may soon get its own.
Despite being the home of Africa the biggest unbanked population, Nigeria has not seen the same exponential growth in mobile money adoption and lags behind regional peers like Ghana and Kenya when it comes to penetration. In January, MTN revealed that MTN Nigeria’s mobile money service had attracted 9.4 million active users since its launch in August 2019.
This approval is expected to boost the adoption of mobile money in Nigeria as the use cases increase. MTN’s extensive coverage will help it serve people across the country, especially in rural areas, and will also position the telecom giant as a competitor for market share and revenue from commercial lenders.
MTN Nigeria, which provides a third of MTN Group’s sales, saw its revenue soar to a record ₦1.7 trillion ($3.4 billion) last year, with profit jumping 45 .5% to reach ₦298.9 billion ($598 million). Mobile money is a growing contributor to MTN Nigeria’s revenue, and the new banking license is expected to allow the company to explore the growth opportunities presented by Nigeria’s unbanked population.