As MTN Nigeria records a 22.90% growth in revenue in 2021, the South African Telecommunication giant, has diversified into banking following an approval of its application to run a conventional commercial bank.
MTN, the mobile telecom firm which started operation in Nigeria since 2001, would by the approval, operate virtually all the services offered by commercial banks except granting credit and processing foreign exchange transactions.
It received final approval from Nigerian regulators to run a payment service bank, the wireless carrier said in a regulatory filing on Monday in Abuja.
“The date of commencement will be communicated to the Central Bank of Nigeria (CBN) in accordance with its requirements,” MTN said and revealed that the bank is to be known as MoMo Payment Service Bank Limited in a note to the Nigerian Exchange.
Karl Toriola, CEO of MTN Nigeria said on April 11, 2022 in Abuja: “We want to leverage the financial inclusion drive. We plan to give people who don’t have bank accounts or even ATM cards the opportunity to be able to do banking services.”
“And we are leveraging on our size. When we have subscribers of over 70 million spread across Nigeria with our infrastructural spread, we are well positioned to cover everywhere. That’s exactly what we want to achieve.”
The broad scale of MTN’s broadband penetration gives it an open reach to rural Nigerians and urban places without access to banking services by way of connectivity, a luxury conventional banks cannot afford.
In December 2021, MTN and Mafab won the bid for 5G spectrum licence auctioned by the Nigerian Communications Commission (NCC).
MTN Nigeria, which provides one-third of the MTN Group’s sales, saw revenue climb to record $3.69 billion ( N1.7 trillion) last year, with profit leaping 45.5 per cent to $652 million (N298.9 billion).
The company generates the bulk of its revenue from Voice calls and data subscriptions.
In its 2021 financial account released last week in Abuja, its customers spent more on data subscriptions, increasing the revenue line by 55.31% while revenue from voice calls appreciated by 6.96%.
The Company has three reportable business segments which are Customer business unit, Enterprise business unit and Wholesale business unit.
The customer business unit generated $3.17 billion (N1.46 trillion), making up 88% of the total revenue. The enterprise business unit generated $321 million (N148 billion), while wholesale business unit generated the least revenue of $102 million (N47.67 billion).
MTN on March 15, 2022 signed a Memorandum of Understanding with the Nigerian Exchange (NGX) to promote financial literacy and enhance retail participation in the Nigerian capital market.
The MoU, a two-year partnership, will see NGX and MTNN collaborating to develop capital market solutions, leverage technology to support data dissemination and technology as-a-service.
It will also promote capacity development, and eliminate barriers to retail participation in the capital market.
Speaking about the MoU, the Chief Executive Officer (CEO), NGX, Mr Temi Popoola, said that the company was committed to democratising finance in Nigeria by leveraging current advancements in technology and relying on strategic partnerships.
“With its customer base of over 68 million customers, MTNN provides invaluable access to a large pool of potential retail investors who can play an important role in Nigeria’s capital market, deepening their own financial resilience in the process.
“This collaboration with MTNN aligns with our aspiration to build an open, professional and vibrant exchange and we are indeed excited about this NGX era,” Popoola said.
