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MTN approved to launch mobile money bank in Nigeria

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Mobile operator MTN has received final go-ahead to launch a payment service bank in Nigeria.

MTN said in a regulatory filing this week that the Central Bank of Nigeria (CBN) had granted it final approval for what its calling the "MoMo Payment Service Bank (MoMo PSB)" to start operations in the West African nation.

Back in November 2021, MTN and rival operator Airtel both received approval in principle from the CBN for licenses.

The PSB license will help telcos offer a wider range of mobile financial services beyond the classic person-to-person Mobile Money (MoMo) transactions that have become popular all over Africa.

"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. 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 President and CEO Ralph Mupita said.

About 38 million adults in Nigeria remain financially excluded, according to local data analytics company Dataphyte. Nigeria's unbanked provide a massive growth opportunity for a mobile giant like MTN which already has 68.5 million subscribers in Nigeria, to which it can now offer additional banking services.

MTN said it would give more details on the banking offering as part of a Q1 trading update planned for early May 2022.

MTN is also looking to spin off and list its MoMo division, which it values at about $5 billion.

SIM card reg bites

The banking license will be good news for MTN as the Nigerian market looks constrained by regulatory rules on SIM card registrations which are set to impact MTN's group revenue by about 3%.

Last week the government of Nigeria ordered telecoms operators to restrict outgoing voice calls on any phone lines that have not been linked to a citizen's National Identification Number (NIN). This is part of a SIM registration process that has been going on since December 2020.

Want to know more about mobile financial services in Africa? Check out our dedicated Fintech content channel here on Connecting Africa.

MTN Nigeria said that 47 million subscribers had submitted their NINs by March 31, 2022, which represents around 67% of the MTN Nigeria subscriber base and 76% of its service revenue.

Outgoing voice revenue from subscribers who have currently not submitted their NINs amounts to around 9% of MTN Nigeria's total service revenue for 2021 and about 3% of MTN Group's service revenue on an annualized basis, it said.

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*Top image is of MTN's new branding. (Source: MTN Group)

— Paula Gilbert, Editor, Connecting Africa

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