Mobile money: CBN requests N5bn capital investment from telcos

The Central Bank of Nigeria has asked telecommunications
companies that intend to deepen financial inclusion in the country
through mobile money services to make a minimum capital deposit of
N5bn.

It was gathered that the apex bank also granted the telcos a
provisional approval to apply for a Payment Service Bank licence
through a subsidiary company.

As contained in the draft guidelines issued by the CBN, an
evidence of the payment of N5bn must be provided when applying for
an Approval in Principle.

The telecoms companies that have indicated interest in driving
the financial inclusion plans of the Federal Government are MTN,
Airtel, 9mobile, Ntel , and Globacom.

Commenting on the guidelines, the Chairman, Association of
Telecommunications Companies of Nigeria, Mr Gbenga Adebayo, said
the PSB licence would allow the telcos to facilitate the payment
but restrict them from giving loans.

In addition, he objected to the minimum deposit of N5bn, saying
it was on the high side considering that other mobile money
operators were asked to make a payment of N2bn.

According to Adebayo, these issues have been addressed in
feedback to the apex bank, expressing optimism that the input will
be considered.

“The justification for the minimum capital deposit is unknown.
However, when compared to the capital requirement for National
Microfinance Banks and Mobile Money Operators which are currently
fixed at N2bn, it is our view that the figure is excessive,
particularly bearing in mind that National MFBs have a wider
service bouquet,” he said.

“We have made our comments on the provisions of the draft
document and we are expecting feedback from the CBN.”

Meanwhile, the CEO of MTN Group, Rob Shuter, on Tuesday,
announced the plans of the company to apply for a mobile banking
licence in Nigeria and launch the service in 2019.

Shuter, while addressing a conference in Cape Town, said, “We
will be applying for a payment service banking licence in Nigeria
in the next month or so, and if all goes according to plan, we will
also be launching Mobile Money in Nigeria probably around Q2 of
2019.”

Telecoms operators in Africa have recorded tremendous reach with
mobile money services on the continent due to their large customer
base, existing distribution network and mobile phone
penetration.

At the centre of the mobile money growth are Safaricom’s M-Pesa,
MTN Mobile money, Orange Money, Tigo Pesa, Vodafone Cash and Airtel
Money.

The five Nigerian network operators recently pledged to deploy
over one million airtime agents for mobile money services in the
country and leverage their mobile base, integrated identity systems
and distribution network to offer financial services to
Nigerians.

They also gave the assurance that they would reach 90 million
people with financial services by 2020.

According to them, other stakeholders and the government would
be engaged to ensure the telecommunications sector contributes its
quota to the 80 per cent total financial inclusion and 70 per cent
formal financial inclusion goal by 2020.

The telcos promised to drive an awareness programme that would
deepen financial literacy across the country, within the next three
months.

Further sharing their plans, they said in six months, they
intend to reach 15 million customers with financial services, and
in one year, they would have reached 35 million Nigerians.

According to the telcos, 70 million Nigerians will be reached in
two years and by the 30th month of commencement of the service, 90
million customers will benefit from the scheme.