MTN receives final approval from CBN to operate Momo Payment in Nigeria

MTN Nigeria, a subsidiary of South Africa-headquartered MTN Group Ltd, announced earlier today that it has received a final approval from the Central Bank of Nigeria to begin operating Momo Payment Service Bank Ltd in the West African country.

In a corporate disclosure that was filed with the Nigerian Exchange as seen by Business Insider Africa, MTN explained that the final approval was given by the apex bank in a letter dated April 8, 2022.

“MTN Nigeria Communications Plc (MTN) announces the receipt of a letter dated 8 April 2022 from the CBN addressed to Momo PSB conveying final approval to commence operations. The date of commencement will be communicated to the CBN in accordance with its requirements,”

– said a part of the statement by MTN.

Bear in mind that the final approval followed an earlier approval in principle which MTN received back in November 2021, as reported by Business Insider Africa. Following the final approval, MTN has reaffirmed its commitment to enabling financial inclusion in Africa’s most populous country.

As you may well know, MTN and other non-bank players have long been anticipating their PSB licenses, since the Nigerian Government first announced its willingness to issue them in 2018. The announcement was seen as a welcome development, a first step in what was deemed a financial revolution. Telecom companies like MTN and Airtel looked forward to taking advantage of the more than 60 million Nigerians who are estimated to be financially excluded, by providing them access to financial tools.

Unfortunately, only a few of these licenses have been issued since then. Some analysts have blamed Nigerian banks for allegedly trying to truncate the plan, out of worry of what the emergence of PSBs could portend for their operations.

Despite the delay, the telecom companies have waited patiently. They understand the opportunities that abound, as well as the fact that the PSB licences would be immensely beneficial to their businesses, hence the wait. As the former CEO of Airtel Africa, Raghunath Mandava, once said, a PSB license would “dramatically change financial inclusion in the country.”

Note that in order to operate a payment service bank in Nigeria, one of the basic conditions is to meet a minimum capital requirement of $12.2 million (N5 billion).


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