Central Bank of Nigeria (CBN) has granted the country’s prime telecoms operator MTN Nigeria a “super-agent” license to allow it set up an agent network to provide financial services to its more than 67 million subscribers.
The license is coming after reforms by the CBN last October, permitting telecoms operators to get mobile money and banking licenses in a bid to boost financial inclusion and facilitate the long-held ambition for a cashless society.
This initiative is the first step in MTN’s plans to finally roll out mobile money services in Africa’s largest economy as the company says it has applied for a payment service bank license, which will allow it “offer a broader and deeper range of financial services.”
MTN currently controls 38 percent of Nigeria’s telecoms share followed by Globacom’s 27 percent, Airtel’s 26 percent and 9Mobile’s nine percent.
As envisaged in several African countries, the real-life application of mobile money among unbanked populations ranges from quick, seamless fund transfers to facilitating payments and boosting small businesses.
In Ghana for instance, the service has been adopted for investing just as MTN has intensified selling shares for its landmark IPO mainly through mobile money.
The Nigerian reforms now allow telecoms operators like MTN to tap into the promise of mobile money to offer similar services locally.
As Africa’s most populous nation as well being home to a vast population of unbanked adults, Nigeria remains an attractive prospect given the success of mobile money services in other parts of the continent.
At the end of last year, there were nearly 400 million registered mobile money accounts—nearly half of the global total—across sub-Saharan Africa with nearly 90% of users in East and West Africa. In Ghana, Kenya and Zimbabwe, over 60% of adults have mobile money accounts.
Compared to standalone startups who have to build marketing and distribution infrastructure through a network of agents from scratch, mobile money services owned by telecoms companies have the in-built advantage of offering their services to an existing user base of millions of subscribers.
The continent’s biggest mobile money players are owned by telecoms operators.
South African-owned MTN has a tumultuous history of billion-dollar fines and lawsuits in its largest market.
Most recently, MTN faced allegations of illegally repatriating $8.1 billion in profits and owing 2 billion in taxes.
In 2016, it reached a $1.7 billion settlement with Nigeria’s government after a protracted SIM card dispute and an initial $5.2 billion fine.