MTN Nigeria, which controls 40 percent market share, and Airtel which has a 27 percent share of the telco market, have been given approval-in-principle by the Central Bank of Nigeria (CBN) to commence banking business in the country, the two leading communication giants said on Friday.
In separate letters addressed to the management of the Nigeria Exchange, the telecom companies announced that their subsidiaries have been granted approval in principle to operate Payment Service Banks in Nigeria.
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“Airtel Africa, a leading provider of telecommunications and mobile money services, with a presence in 14 countries across, today announces that its subsidiary SMARTCASH Payment Service Bank Limited (“Smartcash”) has been granted approval in principle to operate a payment service bank business in Nigeria,” the company said in its letter.
It said the “Final approval is subject to the Group satisfying certain standard conditions within six months”.
On its part, MTN said: “MTN Nigeria communications PLc as promoter received an approval in principle dated 4 November 2021 from the CBN for a licence application for the proposed MoMo Payment Service Bank Limited”.
MTN said the grant of approval in principle is the first step in the process towards final approval, subject to the fulfillment of certain conditions as stipulated by the CBN.
“The decision to issue a final approval is firmly within the regulatory purview of the CBN and we respect their right and judgment in that regard,” it said.
Reacting to the development, 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”.
He said that the final operating licence will enable Airtel to expand its 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,” Ogunsanya said.
In its response, MTN Nigeria affirmed its commitment towards the financial inclusion agenda of the CBN and the Federal Republic of Nigeria and promised to continue to explore means whereby it can contribute to its fulfillment.
“While we look forward to the eventual grant of a final PSB licence, we will continue to communicate material information in accordance with regulatory obligations and guidelines,” MTN said.
The granting of banking lincences to the telecoms will set off a new competition between them and the banks.