MTN Group has been granted final approval for the Mobile Money (MoMo) Payment Service Bank (PSB) licence in Nigeria to commence operations.
The mobile operator announced today it has been given permission to operate the bank by the Central Bank of Nigeria (CBN), and it will soon offer financial services in accordance with the licence requirements.
MTN Group first announced its steps in the process towards final approval of the licence in November, saying this was subject to the fulfilment of certain conditions, as stipulated by the CBN.
With the Payment Service Bank licence, MTN Nigeria will offer a wider range of mobile financial services beyond the traditional person-to-person mobile money transfers, such as lending and bill payments.
The approval of the banking licence in Nigeria comes as MTN Group is on track to spin off its lucrative fintech business. The telco has set the second quarter of the 2022 financial year as the deadline to spin off its financial services unit.
This is part of MTN’s strategy outlined in June last year, with CEO Ralph Mupita saying the structural separation of the fintech and fibre units was key to the group’s Ambition 2025 plan.
“We are grateful to the CBN for granting the final approval to commence the operations of MoMo PSB, which is an important milestone for our Ambition 2025 strategy,” says Mupita.
“We are excited about the opportunity for MTN Nigeria to support the CBN and the Federal Republic of Nigeria in fulfilling the agenda of driving financial inclusion in Nigeria.”
MTN Group will provide more details next month regarding commencement of operations, along with related matters and timelines.
The granting of a banking licence in MTN’s most lucrative market is set to bolster the group’s operations in Nigeria. The country remains MTN’s biggest market and contributor of the lion’s share to the group’s revenue.
In the financial year ended December 2021, MTN Nigeria reported strong operational performance, delivering growth across all revenue lines.
MTN Nigeria’s service revenue grew by 23.3%, exceeding its mid-term target, driven mainly by growth in voice, data and fintech service revenue lines.
Data revenue rose by 55.3%, as MTN continued to accelerate the expansion of its 4G coverage. MTN Nigeria’s 4G network now covers 70.3% of the population, up from 60.1% in December 2020.
Similarly, fintech revenue surged by 57.3%, due to sustained growth in the use of its Xtratime product and broader fintech services.
In the period, MoMo transaction volume rose by 167% to 137.5 million from an active user base of 9.4 million, up 102%.
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