The Central Bank of Nigeria (CBN) has granted approval-in-principle for Payment Service Bank (PSB) licenses to MTN Nigeria and Airtel Africa. This approval-in-principle aligns with the CBN’s objective of enhancing financial inclusion and the development of the payment system through a secured technology-driven environment.
In a bid to reach Nigeria’s large unbanked population, the CBN had expressed its intention to allow non-financial companies to apply for mobile banking licenses – Payment Service Banks (PSBs). PSBs are expected to leverage on mobile and digital channels to enhance financial inclusion and stimulate economic activities at the grassroots through the provision of financial services. The CBN had further given Guidelines for the licensing and operation of PSBs in Nigeria.
Hear from MTN and Airtel
In a statement obtained from the Nigerian Exchange Limited (NGX) website, MTN Nigeria Communications Plc announced the approval on November 5, 2021, from the CBN for a license application for the proposed MoMo Payment Service Bank Limited.
According to the statement signed by Uto Ukpanah, MTN Nigeria’s Company Secretary, “this is the first step in the process towards a final approval, subject to the fulfilment of other stipulated conditions. The decision to issue a final approval is firmly within the regulatory purview of the CBN and we respect their right and judgement in that regard.”
The announcement was made through a press release dated 5th of November 2021, acknowledged by the Company’s Secretary, Uto Ukpanah, and filed with the Nigerian Exchange Limited (NGX).
In the same vein, Airtel Africa Plc released a statement signed by its Group Company Secretary, Simon O’Hara, stating the grant of the approval in principle to operate a payment service bank called SMARTCASH Payment Service Bank Limited (“Smartcash”)
According to the CEO of Airtel Africa, Segun Ogunsanya, “I am very pleased that Smartcash has been granted an approval in principle to operate a service bank business in Nigeria. We will now work closely with the Central Bank to meet all its conditions to receive the operating licence and commence operations. The final operating licence will enable us to expand our digital financial products and reach the millions of Nigerians that do not have access to traditional financial services. I am looking forward to working closely with the Government, the Central Bank and traditional financial institutions to expand financial inclusion and meet the evolving needs of our customers and the economy. “
Within six months of the grant of the approval-in-principle, both companies are expected to submit an application for the grant of a final license to the CBN accompanied by other conditions laid down by the CBN in its Guidelines.