MTN Nigeria obtains approval-in-principle from CBN to launch MoMo Payment Service Bank.

MTN Nigeria Communications Plc announced that it has obtained an Approval-in-Principle (AIP) from the Central bank of Nigeria (CBN) to launch its proposed MoMo Payment Service Bank Limited. The approval is one of the foremost actions required to obtain a final approval from the apex banking authority, subject to the fulfillment of other stipulated conditions.

The announcement was made through a press release dated 5th of November 2021, acknowledged by the Company’s Secretary, Uto Ukpanah, and filed with the Nigerian Exchange Limited (NGX).

Excerpts of the recent press release reads: ‘’MTN Nigeria Communications Plc (MTN Nigeria) as promoter, received an Approval in Principle (AIP) dated 4 November 2021 from the Central Bank of Nigeria (CBN) for a licence application for the proposed MoMo Payment Service Bank Limited.’’

Recall that MTN Nigeria has never hidden its desire to become a full-fledged financial services bank. Two year ago, the telecommunications giant launched its mobile money transfer service called MoMo Agent Network. The launching was part of an ambitious move by the teleco to replicate in Nigeria, what Safaricom’s M-Pesa did in Kenya. The product launch is sequel to the obtaining of a super-agent license by the teleco to provide banking services.

Analysts believe that the entrance of MTN into the Nigerian financial services space will heighten competition especially with commercial banks and Fintechs. Nevertheless, the competition is necessary to drive financial inclusion through the provision of diverse and heterogeneous financial services to the unbanked population. Sharing this school of thought is the Vice President of Nigeria, Professor Yemi Osibanjo who recently charged commercial banks to allow other critical stakholders to partake in financial services. The number 2 man made the call during the recently concluded 2021 Banking and Finance Conference organized bu the Chartered Institute of Bankers of Nigeria (CIBN), themed ‘’Economic Recovery, Inclusion and Transformation: The Role of Banking and Finance.’’

Similarly, the teleco giant affirmed that the recent move is a demonstration of its commitment towards the financial inclusion agenda of the CBN and the Federal Republic of Nigeria, and that it will continue to explore means whereby it can contribute to its fulfillment.

Nairametrics had earlier reported that 38 million Nigerian adults, translating to about 36% of the total adult population in the country, were financially excluded by the end of 2020. This figure falls short of the revised National Financial Inclusion Strategy targets, which projected a 20% exclusion rate for the period under review.

Meanwhile, recall that MTN Group yesterday announced that it is planning to sell about 575 million units of its shares in its Nigeria unit through a Public Offer.  Following the announcement, the share price of MTN Nigeria gained about 2.51% at the local bourse to close at N180 per share.

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