Nigeria’s biggest telecoms firm MTN has launched a mobile money transfer service, targeting those without bank accounts, and said on Thursday it plans to become a payment services bank once it obtains approval from the central bank.
The success in east Africa of M-Pesa, the mobile money unit of Kenya’s Safaricom, has convinced investors and the industry that financial services are the next growth area for the telecoms sector, where prices for basic services are falling.
Nigeria said last year it would allow telecom companies to provide banking services, aiming to give millions of Nigerians without bank accounts access to mobile money services.
MTN Nigeria was awarded a license by Nigeria’s central bank in July to provide financial services.
Majority owned by South Africa’s MTN Group, the company runs Nigeria’s biggest mobile phone network serving around 56 million people.
MTN Nigeria’s CEO Ferdi Moolman said its Yello Digital Financial Services Limited (YDFS) unit would extend access to simple money transfer services and other financial services.
More than half of Nigeria’s population of 180 million do not have a bank account.
Shares in MTN Nigeria, which was listed on the local bourse in May, fell 1.49% to 144.50 naira on Thursday, valuing the telecoms firm at 2.95 trillion naira ($9.64 billion).
MTN Group appointed Rob Shuter as chief executive in 2016 to oversee the formulation of a new strategic growth plan and look for new revenue streams as competition and regulation hit profit margins.
Shuter, who has previous banking experience, has been revamping Africa’s biggest telecoms group, seeking returns in everything from financial services to music and video games.