The approval gives the company permission to operate virtually all of the services offered by conventional commercial banks except for the granting of credit and the processing of foreign exchange transactions.

The telecommunications company, MTN, said in a regulatory filing on Monday that the telecom operator, had received final approval from Nigerian regulators to operate the payment service bank.

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

The approval, the fruit of more than two years of waiting for the permit, gives the local unit of Johannesburg-headquartered MTN Group Limited the license to operate virtually all services offered by conventional commercial banks, except for credit grants and foreign currency processing transactions.

Carl Torreola, CEO of MTN Nigeria

‘We want to take advantage of the financial inclusion campaign. We plan to give people who do not have bank accounts or even ATM cards the opportunity to be able to do banking services,’ a senior operator of the telecom company told PREMIUM Time on condition of anonymity due to the sensitivity of the largest company said in Nigeria in terms of revenue.

‘And we are capitalizing on our scale. When we have over 70 million subscribers across Nigeria with our infrastructure spread, we are well positioned to cover everywhere. Without mincing words, that is exactly what we want to achieve.’

MTN Nigeria and Airtel Africa, which secured initial approvals last November to operate in the same space, are looking to tap Nigeria’s 38 million adult unbanked population, which according to Abuja-based media research house and data analytics firm , they held N26. 2 trillion last year alone, a move that would pit both telecom companies against traditional banks for a slice of the money.

Shares in the telecom operator were up 0.34 percent at 12.19 watts at Customs Street Lagos on Monday, trading at N206 per unit.

The broad reach of MTN’s broadband penetration gives the two open access to rural and urban Nigerians without calling banking, which traditional luxury banks cannot afford.

The ubiquity of telecom coverage means that banking will no longer be the monopoly of commercial lenders, a development that could put the latter at a premium in the e-business profits of traditional lenders at a time when most banks are struggling to maintain profit growth.

For 2021, GTCO, Nigeria’s second-largest bank by market capitalization, saw its earnings fall to a four-year low, while rival UBA managed to grow by 4.3 per cent and Zenith by 6.1 per cent. In December, MTN and Mafab won a tender for a 5G spectrum license at auction by the Nigerian Communications Commission.

MTN Nigeria, which provides a third of the MTN Group’s sales, saw revenue soar to 1.7 trillion nisani last year, with profits jumping 45.5 percent to 298.9 billion.

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