MTN NIGERIA LICENSED TO BECOME A BANK
- August 6, 2019
- Posted by: Isaac Atoyebi
- Category: Uncategorized
The Nigeria largest telecoms network operator MTN Nigeria has been granted a “super-agent” license which allows MTN Nigeria to structure an agent network through which it can provide financial services. The super-agent permit is the first step in MTN’s agenda in rolling out mobile money services in Africa’s largest economy.
The license approval is an aftermath of the rectifications made by Nigeria’s central bank last October allowing telecoms operators to get mobile money and banking licenses in a bid to improve financial inclusion and pro[pagate the long-held ambition for a cashless society.
As seen in some African countries, the real-life application of mobile money among the unbanked citizens ranges from quick, secure fund transfers to facilitating payments and improving small businesses.
The reforms by CBN now allow telecoms operators like MTN to tap into the promise of mobile money to offer similar services locally. Nigeria remains an attractive market, given the success of mobile money services in other parts of the continent and due to her large number of unbanked citizens.
At the end of 2018, there were about 400 million registered mobile money accounts—almost half of all the global total—across Africa, with nearly 90% of users in East and West Africa. While In countries like Ghana, Kenya and Zimbabwe, more than 60% of adults have mobile money accounts.
In contrast, the standalone startups will go through a rigorous process of building a marketing and distribution structure through networks of agents from scratch. The mobile money services that are owned by telecoms companies have the in-built edge of delivering their services to an existing user base of millions of subscribers. Indeed, the continent’s most prominent mobile money players are all owned by telecoms operators.
Due to its longstanding status as Nigeria’s most dominant telecoms operator, MTN Nigeria will have access to a pool of 67 million users to offer its services. Moreover, there’s room for significant upside soon as Nigeria is predicted to add over 31 million mobile subscribers by 2025.
The license is said to be a part of South African-owned MTN’s delicate balancing act in Nigeria. It has a turbulent history of fines and lawsuits in its largest market.
Of recent, the company faced charges of illegally repatriating $8.1 billion in profits and owing $2 billion in taxes. It finally reached a $1.7 billion settlement with the government of Nigeria after a prolonged SIM card disagreement and an initial $5.2 billion fine In 2016.