MTN Nigeria and Airtel Africa, two of Nigeria’s largest telecommunications companies, announced in November that they have received approval in principle from the Central Bank of Nigeria (CBN) to operate payment service banks (PSBs).

PSBs offer financial services, including deposit-taking from individuals and small businesses, providing payment and remittance services, issuing debit and prepaid cards, running electronic wallets, and other services. The CBN PSB Licence prohibits the banks from engaging in granting any form of loans, advances or guarantees directly or indirectly to customers.

The approval granted to the telcos is the first step in the process to get the final approval from the CBN. In order to obtain the full licence, the telcos will need to fulfil certain regulatory requirements stipulated by the CBN within six months.

Segun Ogunsanya, Airtel Africa’s Chief Executive Officer, commented on the project saying: “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 reach the millions of Nigerians that do not have access to traditional financial services”.

It has to be noted that MTN will operate through MoMo Payment Service Bank Limited while Airtel will operate through its Smartcash Payment Service Bank Limited.