More Africa NewsNigeria: Billionaire Adenuga’s Globacom launches commercial activities of its payment service bank

October 11, 2022by myles0

Mobile payments are growing in Nigeria. According to data from NIBSS, the value of transactions increased by 172.2% to N4.9 trillion in the first four months of 2022 from N1.8 trillion in the same period of 2021.

Nigerian telecom operator Globacom, founded and owned by billionaire Mike Adenuga, has announced that MoneyMaster PSB, its payment services banking unit has commenced business operations in Nigeria. The company joins rivals 9Mobile, MTN and Airtel which already operate payment banking units in the country.

To establish itself in the financial services segment, Globacom intends to deploy a large agent network of over 100,000 agents across Nigeria, including rural areas. The company also plans to deploy thousands of kiosks across the country.

Pursuant to its license, MoneyMaster PSB will provide many services provided by commercial banks: payments and money transfers in Nigeria; cash deposits for individuals and small businesses; issuance of debit cards and prepaid cards. However, payment banks differ from commercial banks in particular by the fact that they cannot grant loans or carry out foreign exchange transactions.

The launch of MoneyMaster PSB marks the entry of all Nigerian mobile operators into the Nigerian banking sector. The Globacom subsidiary got final approval from the Central Bank of Nigeria (CBN) in November 2020 along with 9Mobile’s 9PSB. MoMo PSB (MTN) and SmartCash PSB (Airtel) obtained their licenses this year.

The introduction of payment service banks is part of the CBN’s efforts to foster financial inclusion in Nigeria, where a large portion of the population is still unbanked. “  Currently, the inclusion rate is around 50%, which means that almost 49.5% of the adult population does not have access to formal banking services. Additionally, 82% of Nigerians currently receive their income in cash  ,” said Zakari Usman, Head of Enterprises at Globacom.

As of December 2021, Nigeria had approximately 133.5 million bank accounts according to data from the Nigeria Inter-Bank Settlement System (NIBSS). Only 54 million of these accounts have been registered with a Bank Verification Number (BVN) as of April 10, 2022. So it’s the 79 million underbanked and unbanked people that MTN, Globacom, Airtel and 9Mobile want integrate into the Nigerian financial services ecosystem.

Source: Agence Ecofin

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