Following the announcement of the Federal Government of Nigeria last year that it would allow Telecommunication Companies to apply for licenses that would allow them provide mobile banking services to citizens, a number of Telcos have applied.
MTN Nigeria recently announced that it had obtained the license on July 25 and it would start developing and scaling its fintech initiatives for the country through its subsidiary, Yello Digital Financial Services Limited (YDFS).
The CEO of MTN Nigeria, Ferdi Moolman said that the telco company’s subsidiary has been granted a ‘Super Agent Licence’ by the Central Bank of Nigeria and it can begin offering fintech services to the country.
By virtue of the licence, YDFS will leverage on the 61.5 million customer base of MTN Nigeria and offer mobile banking and financial services to them without necessarily requiring a bank account. The telco subsidiary will work to build its agent network of mobile money agents and small businesses that will bring financial services to more Nigerians and deepen the financial inclusion in the country.
The ‘Super Agent Licence’ enables MTN Nigeria to delve deeper into the fintech industry to an extent. Through YDFS, the telco company wants to be able to provide financial services such as merchant payments, deposits and savings, Peer-to-Peer payments, and utility payments to the populace currently outside the operational boundaries of a Super Agent Licence but can be done with a ‘Payment Service Banking Licence’ (PSB).
Through the network established by YDFS, MTN is in a position to broaden the availability of financial services for the under-served across the country. This marks a very important first step in leveraging our infrastructure to scale our Fintech initiatives. We have also applied for a Payment Service Bank Licence, which will enable us in time to offer a broader and deeper range of financial services to those communities and we remain hopeful we will receive approval shortly.
Ferdi Moolman CEO, MTN Nigeria
The existence of large banks such as Access Bank and First Bank in the country will provide stiff competition for the telco companies going into financial services. However, with 61.5 Million Nigerians currently subscribing to MTN, YDFS has a large pool of potential customers to work with.
The fintech provider also has its sights set on rural and unbanked areas.
With a PSB license already applied for, Introduction of Microfinance banking, Agent Banking, Tiered Know-Your-Customers Requirements and Mobile Money Operation (MMO) are some of the services YDFS may subsequently offer in order to increase the number of people with access to financial services in Nigeria.
Technext Newsletter
Get the best of Africa’s daily tech to your inbox – first thing every morning.
Join the community now!
