CBN’s PSB patent to MTN

CBN, in its attempt to promote financial inclusion and sound financial system in Nigeria, recently issued a PSB Licence to MTN. JULIANA AJAYI writes on the potency of this patent

Since its launch in 2001, MTN has consistently spread its wings in Nigeria’s telecommunications sector. In the early 1980s, communications between people and their relatives in far-flung places was through writing. But in 1985 when the communications department, popularly referred to as Post and Telecommunications of the Ministry of Communications merged with Nigerian External Communications, Nigeria Telecommunications Limited was birthed to ease the means of communication.



Before MTN’s launch in Nigeria, the fastest means of communication was through various public phone booths installed across the country’s urban areas. Then, a lady in Obalende needed not write to her brother in the United States and wait for about a month to receive feedback. She only needed to walk to any of the phone booths and place a call. 

However, a new era came with the Global System for Mobile Communications in the wake of the 21st century. Strive Masiyiwa’s Econet set the ball rolling on August 5, 2001. MTN followed suit the same month.

Today, MTN is present in over 200 cities and towns in Nigeria. 

According to Ookla, an Internet and connectivity speed-tester, in a market analysis conducted on Nigeria’s fast Internet service providers in 2021, MTN was ranked fifth in terms of connection consistency, and eighth in terms of latency with a speed score of 7.56. 

By providing wireless communication services, including roaming, Internet, bill payment, data management and Subscriber Identity Module registration, MTN, in April 2022, received Central Bank of Nigeria’s approval to run a Payment Service Bank. 


A fine print 

Following MTN’s achievement in Nigeria spanning over two decades, it was granted licence by the CBN to launch its MoMo PSB in April. This came after it introduced a listing on the Nigerian Exchange Limited, which allows MTN Nigeria’s shareholders to trade their shares on the stock market.

MTN MoMo PSB is a fintech subdivision of MTN Nigeria. The PSB is designed to allow majority of Nigerians to access a wide range of financial service products with over 166,000 agents across the country. This service essentially gives access to unbanked Nigerians to pay bills, as well as send and receive money. 

According to CBN’s reviewed guidelines for licensing and regulation of PSBs in Nigeria, the apex bank was quoted as saying the National Financial Inclusion Strategy aims to grant access to financial services to more than 80 per cent of bankable adults in Nigeria.

The report read, “The CBN, in furtherance of its mandate to promote a sound financial system in Nigeria and the need to enhance access to financial services for low-income earners and unbanked segments of the society, continues to be innovative in deepening the financial services sector. The NFIS seeks to ensure that over 80 per cent of the bankable adults in Nigeria have access to financial services by 2020.

“The CBN, in collaboration with stakeholders, launched the NFIS on October 23, 2012, to reduce the exclusion rate to 20 per cent by 2020. Despite several initiatives, including the introduction of microfinance banking, agent banking, three-tiered Know-Your-Customer requirements and Mobile Money Operation in pursuit of this objective, the inclusion rate remains below expectation. In collaboration with critical stakeholders in the digital financial ecosystem, such as the Nigerian Communication Commission, commercial banks, MMOs and telecommunication companies, the CBN has gone on several study tours of other jurisdictions that made significant progress in driving financial inclusion.” 

To promote its financial inclusion targets, the CBN gave complete licences to MTN in 2018, and three other major Mobile Network Operators in Nigeria viz Globacom, Airtel and 9Mobile. The licence given to MTN allows it to provide Point of Sale and Automated Teller Machine services; give customers debit and prepaid cards; be involved in money transfer, bill payments, deposits and so on. 

These services are in furtherance of the apex bank’s report, which states, “PSBs shall: operate mostly in the rural areas and unbanked locations targeting financially excluded persons, with not less than 25 per cent financial service touch points in such rural areas as defined by the CBN from time to time; and enter into direct partnership with card scheme operators – such cards shall not be eligible for foreign currency transactions; deploy ATMs in some of the areas; deploy PoS devices; be at liberty to operate through banking agents (in line with the CBN’s Guidelines for the Regulation of Agent Banking and Agent Banking Relationships in Nigeria); roll out agent networks with the prior approval of CBN; use other channels, including electronic platforms, to reach out to its customers; establish coordinating centres in clusters of outlets to superintend and control the activities of the various financial service touch points and banking agents; be technology-driven and conform to best practices on data storage, security and integrity; and set up consumer help desks (physical and online) at its main office and coordinating centres.”


Past and future 

A critical look at MTN would make one delve into its challenges, vision and passion.

MTN, formerly M-Cell, was founded in 1994 in South Africa. Following series of mergers between 2008 and 2012, MTN has since launched operations in over 20 countries in Africa and the Middle East. 

By 2020, MTN recorded over 250 million subscribers, making it the largest network provider in Africa. Nigeria remains a big part of its progress, providing one-third of its revenue.

The telecoms firm is the second cellular provider to introduce 4G and LTE in South Africa; it is also the first network operator in that country to launch a live public 5G network in Johannesburg and Cape Town in 2020.

In November 2012, South African holding company, Shanduka Group, acquired a minority stake in MTN Group’s Nigeria business for $335m.

According to the company, the addressable mobile telephony market in its present footprint will grow to over 381 million in the next five years from over 200 million current subscribers. 

In 2021, Global Credit Ratings, a rating agency in Africa that offers critical insight into credits across various sectors, upgraded the national scale long-term issuer rating of MTN Nigeria to AAA, affirming the national scale short-term rating of A1+ with a stable outlook. 

Attached was an upgrade in the national scale long-term rating of the N110bn Series 1 Senior Unsecured Bond to AAA with a stable outlook. Following the rating, MTN Nigeria announced the decision to sell 14 per cent of its shares, and let in close to two million retail investors.

The Executive Secretary/Chief Operating Officer, Association of Telecommunications Companies of Nigeria, Ajibola Olude, said, “With this, it would be easy to mobilise funds, which means they will be able to collect and transfer money that will be useful to many people that do not have access to banking services; they do not need an account number, as their phone numbers are virtually their account numbers.

“What differentiates traditional banking from MTN Momo Service is that the latter does not keep loans like the former. This platform provides mobilisation of funds all over the country because when you look at the number of people having phones, they are more than account holders.”

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