The Central Bank of Nigeria has granted a licence to a subsidiary of MTN Nigeria Communications to provide mobile banking services, media reports said. The MTN Group holds a major stake in MTN Nigeria.

Last year, the group had said that it would apply for a mobile banking licence in Nigeria in a hope to launch the service in 2019. Being South Africa’s largest telecom company, it has faced significant challenges in Nigeria. The company was involved in a dispute after the central bank said that it illegally transferred $8.1 billion overseas, media reports said. 

Toward the end of last year, Nigeria had announced that it would allow telecom companies to provide mobile banking services. The decision stemmed from the country’s efforts to offer citizens access to mobile money services without the need for bank accounts. 

Mobile money services have been quite successful in east Africa. MTN Nigeria’s CEO Ferdi Moolman, said, “Through the network established by YDFS, MTN is in a position to broaden the availability of financial services for the under-served across the country. This marks a very important first step in leveraging our infrastructure to scale our fintech initiatives.”

Moolman added that MTN Nigeria has also applied for a Payment Service Bank Licence. The licence over a period of time will allow the company to offer a broad range of financial services to communities. The company hopes to receive the licence shortly. 

Last year, the World Bank said that if MTN Nigeria is granted licence, its mobile banking services will cater to 60 percent of the Nigerian population who do not have access to a bank account. 

Byron Lotter, fund manager at Vestact, said, “It’s a huge opportunity for MTN.” Vestact owns shares in MTN. In the six months to June, the company has added 3.3 million customers to its network. Moolman said that strong data and voice revenue has reinforced the company’s performance during that period.