MTN Nigeria Communications Plc., a subsidiary of the South African multinational mobile company, said it has been granted super-agent licence by the Central Bank of Nigeria (CBN).
The new licence will enable the biggest telecommunication company in the country to join forces with other financial technology companies to deepen financial inclusion in the country through an agent network.
The move by MTN Nigeria is also in line with its application for a licence to operate as a Payment Service Bank (PSB). According to industry sources, the Y’ello Digital Financial Service is part of the Central Bank of Nigeria requirements for obtaining a PSB licence.
“We are pleased with obtaining a super-agent licence from the Central Bank of Nigeria, which will enable us to build an agent network and accelerate the growth of our Fintech business,” Ferdi Moolma, the Chief Executive Officer, MTN Nigeria, confirmed in the company’s 2019 half-year interim financial report published Friday on its website.
Checks by BusinessDay revealed that MTN Nigeria recently registered the Y’ello Digital Financial Service Limited with the Corporate Affairs Commission. The subsidiary, which has yet to commence operations, was created in June 2018 to provide mobile financial services to Nigerians.
“We are still expecting the approval from CBN. The PSB is to provide mobile financial services upon incorporation,” MTN said in its 2018 financial report.
Other mobile network operators such as 9mobile, Globacom, and Airtel have also shown interest in offering mobile financial services in the country.
Some of the telecom operators are already offering mobile money services in collaboration with Deposit Money Banks but are now seeking to offer financial services independently.
Haven obtained the super-agent licence through its subsidiary, Y’ello Digital Financial Services Limited; MTN Nigeria said it has invested N50million in the Fintech business during the first half of the year, with respect to the minimum shareholding requirement stipulated by the CBN for a super-agent licence.
Recall, MTN, along with Airtel, Globacom, 9mobile and ntel, had pledged to deepen financial inclusion in 30 months by collectively reaching 90 million Nigerians through the deployment of over one million airtime agents as mobile money agents.
Nigeria’s Telco industry players have a combined presence in 773 local government areas across the country further emphasizing their ability to reach especially hard to reach areas of the country.
The communication service providing companies in Nigeria also have about one million unique agents already in place selling airtime across the country, and analysts say this can quickly be converted to establish mobile money agent networks which can help reach out to the unbanked Nigerians especially those in the rural areas.
Approximately 36.8 percent of adult population in Nigeria, Africa’s most population nation are excluded from the financial cycle, this translate to 36.6 million people, but the country’s apex bank have a set target to reduce that number to 20 percent by 2020, less than six from now.
According to London based Group Special Mobile Association (GSMA), “from a regulatory perspective, one basic requirement for mobile money to succeed is to create an open and level playing field that includes non-bank mobile money providers such as Mobile Network Operators (MNOs).”
Telco led model in driving financial inclusion in Nigeria’s peers has reported tremendous progress owing to the already existing large customer base of the Telcos, but Africa’s largest economy with one of the highest exclusion rates in the continent has continued to lag its peers owing to its bank-led financial inclusion model.
Data by the National Communications Authority (NCA) in Ghana as analysed by BusinessDay revealed that MTN Ghana has been the consistent market leader by number of subscriptions between 2012 and 2017.
Across the five-year period, the company’s market share rose to 47.5percent in 2017; Vodafone Ghana’s market share also rose from 21 percent in 2012 to 24.1 percent in 2017. While Airtel Ghana and Tigo Ghana experienced marginal changes in market share, falling 0.37 percent and rising 0.71 percent respectively.
Leveraging its large market share by subscriber base, MTN Ghana has also reported the highest percentage of mobile money transactions. This give hint of how the Nigerian arm of the Telco Company may perform if given PSB licence to operate in the country where it already has the largest share of the market.
According to the 2018 second quarter data by the Nigerian Communications Commission (NCC), MTN Nigeria grew its subscribers to 66.45 million. This was followed by Globacom Limited with 40.11 million while Airtel Nigeria and EMTS Limited (9mobile) were left with 39.89 million and 15.81 million respectively.
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