MTN Group’s shares soared to close 13% up on Friday after the Central Bank of Nigeria (CBN) finally granted approval in principle for MTN Nigeria to operate its proposed Mobile Money (MoMo) service.
The shares closed at R167 on the JSE.
“This is the first step in the process towards a final approval, subject to the fulfilment of certain conditions as stipulated by the CBN,” said Uto Ukpanah, MTN’s company secretary.
The news is a boost for MTN and rival Airtel Africa, which have been awaiting the granting of PSB licenses since 2018, when the CBN indicated its intention to do so.
The companies are expected to meet a number of conditions before receiving the Payment Service Bank (PSB) licence required by the CBN for operators who provide financial services for low-income earners and the unbanked digitally.
“The decision to issue a final approval is firmly within the regulatory purview of the CBN and we respect their right and judgement in that regard,” said MTN.
The granting of the licence is seen as a catalyst for financial inclusion in Nigeria, Africa’s biggest economy and most populous country.
Nigeria has a low banking penetration and – according to a EFInA (Enhancing Financial Innovation & Access) report – 36% of Nigerian adults were unbanked, with no access to financial services at the end of 2020.
“MTN Nigeria affirms its commitment towards the financial inclusion agenda of the CBN and the Federal Republic of Nigeria and continues to explore means whereby it can contribute towards its fulfilment,” said Ukpanah.
MTN said that during the quarter ended September, it had reached 51 million MoMo customers in 16 markets, processing almost 20 000 transactions a minute, with the value of transactions up 67.2% year-on-year to $175.5bn (R2.7 trillion).
MTN Nigeria fintech has seen robust growth with its MoMo active subscriber base jumping by a whopping 97.2% to 6.6 million year-on-year during the nine months ended September. MoMo transaction volumes in the nine months ended September rose by more than three times, to 93.3 million, said MTN Nigeria last week.
According to Quartz Africa, Sub-Saharan Africa moves more money on mobile phones than anywhere else in the world and the region is responsible for an astonishing 45.6% of mobile money activity in the world.
Last week, MTN announced a public offer of just under 3% of shares in MTN Nigeria, its biggest market, saying it was on track to reduce holding company debt, raising hopes of dividends .
MTN said it plans to sell up to 575 million shares in MTN Nigeria (101.1 billion naira) R3.7bn as part of its focus to "further localise" 14% of the group’s holding in MTN Nigeria over the short to medium term. The offer is expected to close next month.
MTN Nigeria is Nigeria’s biggest telecoms company, with 67.5 million mobile subscribers.
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