The Nigerian Central bank will allow MTN and Airtel to operate as a bank

MTN and Airtel are two major telecommunication companies that operate in Nigeria. The companies sell airtime and data to millions of telephone owners in Nigeria and other African countries.  Now that MTN and Airtel have been approved by the Central bank of Nigeria to operate as a bank. It will be interesting to what this means for Nigerian banks in terms of competition.

Segun Ogunsanya, CEO, Airtel Africa, said, “I am very pleased that Smartcash has been granted an approval in principle to operate a service bank business in Nigeria. We will now work closely with the Central Bank to meet all its conditions to receive the operating licence and commence operations.

“The final operating licence will enable us to expand our digital financial products and reach the millions of Nigerians that do not have access to traditional financial services. I am looking forward to working closely with the Government, the Central Bank and traditional financial institutions to expand financial inclusion and meet the evolving needs of our customers and the economy.”

Uto Ukpanah, company secretary at MTN Nigeria, said, MTN Nigeria remained optimistic that it would eventually get the PSB licence.

“This is the first step in a long process that would lead to eventual approval. In other words, MTN Nigeria would be required to fulfil a number of conditions, even as ‘the decision to issue a final approval is firmly within the regulatory purview of the CBN’,” the statement reads.

“MTN Nigeria expressed optimism that it would eventually get the PSB license, and reaffirmed its commitment to the financial inclusion agenda of the CBN in Nigeria.”

If MTN and Airtel start to operate as a bank this will allow these companies to increase their revenue because Nigeria banks are allowed to charge unnecessary fees to their customers.  Also, we expect MTN and Airtel investors to benefit from this move.

MTN Nigeria communication limited stock is selling for N185 per share and Airtel Africa PLC (AIRTELAFRI.LG) will cost N830 to buy per share right now. Investors should expect to see a significant share price increase following this new development.