Will banking licenses for MTN and Airtel disrupt retail banking?
Two weeks ago, the Central Bank of Nigeria (CBN) gave approval in principle (AIP) to two of Nigeria’s largest telecommunications companies, MTN and Airtel. With these AIPs, the subsidiaries of these operators, MoMo and Smartcash, have become Payment Service Banks (PSB).
What’s interesting is that PSBs are not new to Nigeria. At least three PSBs were operational until the first week of November 2021. Yet the last two CBN approvals have sparked some excitement – possibly terror and uncertainty – within some financial institutions.
Let’s take a look at two reasons behind the excitement behind approvals. The first is that these new licenses are for subsidiaries of Nigeria’s largest and most efficient telecommunications operators, MTN.
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