CBN Gives Airtel, MTN Approval to Start Banking Business in Nigeria


Alt: = "Airtel and MTN logos"

The Central Bank of Nigeria has granted approval-in-principle to the two leading  telecommunications giants in Nigeria to commence Payment Service Banking.

The two telecoms disclosed this on Friday, 5th October. 

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 (PSB) in Nigeria.

“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”.

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”.

Airtel boss 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.

Read also: List of Top CBN Approved Fintechs

MTN in its own letter 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.

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

Presently, MTN Nigeria and Aitel Nigeria control 40% and 27% telecom market shares respectively.

Read also: Lemonade Finance, International Money Transfer Startup Launches in Africa

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