MTN‘s Mobile Money (MoMo) Payment Service Bank has been granted a licence by the Central Bank of Nigeria, allowing it to expand its services to include banking activities.
MTN Nigeria’s revenue is increasing as a result of mobile money, and the new banking licence would allow the company to capitalise on the country’s unbanked population.
The final approval to start operations of MoMo bank, according to MTN Group CEO Ralph Mupita, is an “essential milestone” for the company’s Ambition 2025 goal, which was launched a year ago. MTN’s largest market is Nigeria, the continent’s most populous country.
Mobile money is an electronic service that allows users to send and receive money, make payments, and conduct other transactions using their smartphones.
Zambia, Ghana, Cameroon, and the Democratic Republic of Congo are among MTN’s African markets that use the system.
MTN Nigeria’s mobile money service had garnered 9.4 million active users since its inception in August 2019, according to the business, which said the rise offered a “strong basis” for the bank’s future setup.
The bank would “offer a formidable platform to foster digital and financial inclusion in Nigeria,” according to the corporation.
In the full fiscal year of 2021, the number of transactions processed through the service increased by 167 percent to 137.5 million.
To diversify their income, mobile communication firms are going into various fintech-based services, with banking services being a prominent area of growth.
According to apex bank criteria, the major purpose of granting Payment Service Bank (PBS) licences is to expand financial inclusion, particularly in rural areas, and to make transactions easier.
PSBs would operate in rural areas and areas where Nigerians do not have access to banking services.
They are also required to provide at least 50% physical points of access in rural areas.
PSBs may have ATMs in multiple of their sites. As a result, customers will be able to withdraw cash. A PSB and a typical commercial bank both have the power to accept customer deposits and invest a portion of those funds in CBN or FG assets for a short period of time.
Commercial banks, on the other hand, are permitted to give credit, whereas PSBs are not. They can also transfer some of their surplus funds to any commercial bank.