Multinational telecommunications companies, MTN Nigeria and Airtel Africa Plc have received approval in principle to operate a payment service bank (PSB) in Nigeria.

The two telcos giants disclosed this in regulatory filings on the Nigerian Exchange Limited (NGX) on Friday.

Payment Service Bank operators provide financial services through digital means to low-income earners and people that do not use banks or traditional banking institutions for transactions.
Airtel will operate PSB via its Smartcash Payment Service Bank Limited while MoMo Payment Service Bank Limited will be MTN’s PSB. The essence is to bring more people into the financial inclusion space.

According to EFInA, about 36 percent of the adult population, representing 38 million citizens, do not have access to financial services in Nigeria.

Segun Ogunsanya, CEO, Airtel Africa Plc, said, “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 CBN 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.”

Uto Ukpanah, executive secretary at MTN Nigeria, said, MTN Nigeria remained optimistic that it would eventually get the PSB licence.
“This is the first step in a long process that would lead to eventual approval. In other words, MTN Nigeria would be required to fulfil a number of conditions, even as ‘the decision to issue a final approval is firmly within the regulatory purview of the CBN’,” the statement reads.

“MTN Nigeria expressed optimism that it would eventually get the PSB license, and reaffirmed its commitment to the financial inclusion agenda of the CBN in Nigeria.”

It’s understandable that the two firms would be required to fulfil some conditions before CBN will grant an operating license.

It was reported that CBN granted licences to Moneymaster PSB, a subsidiary of Glo and 9PSB, a subsidiary of 9mobile in 2020.