Nigerian regulators have given South African Telecommunication giant MTN the go-ahead to run a conventional commercial bank, the telco said Monday.
MTN, the mobile telecom firm which started operation in Nigeria since 2001, will now be able to offer services offered by commercial banks except granting credit and processing foreign exchange transactions.
“The date of commencement will be communicated to the Central Bank of Nigeria (CBN) in accordance with its requirements,” MTN said.
In a note to the Nigerian Exchange, MTN said the new outfit will be known as MoMo Payment Service Bank Limited.
Karl Toriola, CEO of MTN Nigeria said on April 11, 2022 in Abuja, “We want to leverage the financial inclusion drive. We plan to give people who don’t have bank accounts or even ATM cards the opportunity to be able to do banking services.”
“And we are leveraging on our size. When we have subscribers of over 70 million spread across Nigeria with our infrastructural spread, we are well positioned to cover everywhere. That’s exactly what we want to achieve.”
The broad scale of MTN’s broadband penetration gives it an open reach to rural Nigerians and urban places without access to banking services by way of connectivity.
In December 2021, MTN and Mafab won the bid for 5G spectrum licence auctioned by the Nigerian Communications Commission (NCC).
MTN Nigeria (MTNN), which provides one-third of the MTN Group’s sales, saw revenue climb to record $3.69 billion last year, with profit leaping 45.5 percent to $652 million.
The company generates the bulk of its revenue from Voice calls and data subscriptions.
In its 2021 financial account released last week in Abuja, its customers spent more on data subscriptions, increasing the revenue line by 55.31 percent while revenue from voice calls appreciated by 6.96 percent.
The company has three reportable business segments which are Customer business unit, Enterprise business unit and Wholesale business unit.
The customer business unit generated $3.17 billion, making up 88 percent of the total revenue. The enterprise business unit generated $321 million, while wholesale business unit generated the least revenue of $102 million.
On March 15, 2022, MTN signed a Memorandum of Understanding with the Nigerian Exchange (NGX) to promote financial literacy and enhance retail participation in the Nigerian capital market.
The MoU, a two-year partnership, will see NGX and MTNN collaborating to develop capital market solutions and leverage technology to support data dissemination.
It will also promote capacity development and eliminate barriers to retail participation in the capital market.
NGX Chief Executive Officer Temi Popoola said, “With its customer base of over 68 million customers, MTNN provides invaluable access to a large pool of potential retail investors who can play an important role in Nigeria’s capital market, deepening their own financial resilience in the process.”
“This collaboration with MTNN aligns with our aspiration to build an open, professional and vibrant exchange and we are indeed excited about this NGX era.”