With Two PSB Licences, Telcos Set to Deepen CBN’s Financial Inclusion


Emma Okonji and Nosa Alekhuogie

Fresh facts have emerged that two out of the three institutions the Central Bank of Nigeria (CBN) recently granted Approval-in-Principle (AIP) to commence operations as Payment Service Banks (PSBs) are owned by two of the leading telecommunications companies (telcos), THISDAY investigation has revealed.

THISDAY gathered that with this development, telcos are now positioned to drive the financial inclusion policy of the apex bank.

The central bank last month granted AIPs to Hope PSB, Money Master PSB and 9PSB, but didn’t give further information about their ownership.

But THISDAY findings showed that while Money Master PSB is owned by Globacom, 9mobile owns the 9PSB, which shows the telcos’ preparedness to be fully involved in the drive for financial inclusion in the country, which they have been clamouring for over the years.

Sources at the two telcos told THISDAY that the AIPs would enable them justify their earlier position that telecoms operators have the widespread infrastructure and the huge subscriber number to drive financial inclusion in the country.

President of the Association of Licensed Telecoms Operators of Nigeria (ALTON), Mr. Gbenga Adebayo, who commended the courage of CBN in granting the AIPs for PSB licence to the telecoms operators, said: “Cashless policy initiative all over the world is telcos-led. I, therefore, call on the CBN to consider granting more telecoms companies the opportunity to drive cashless economy in Nigeria.”

MTN and Airtel, in their half-year financial reports posted on the Nigerian Stock Exchange (NSE) recently, said they were awaiting regulatory approval for PSB licence, having applied to CBN in 2018.
The Director of Payments Systems Management at the CBN, Mr. Samuel Okojere, who confirmed the development, said the CBN decided to extend the PSB licence to the telecoms operators to test their capabilities and claims that they can successfully drive financial inclusion through their nation-wide telecoms infrastructure.

“Telcos cannot play directly in the financial payment space but because they have the network, CBN allowed them to work with institutions that are licensed to offer financial services so that they can be properly regulated, and CBN can withdraw the licence when they perform below expectations.

“MTN and other telcos already have the Super Agent licence and they have started deploying the services in rural community and the CBN expects them to perform well,” Okojere said.
Regional Director, Marketing Communications at Globacom, Mr. Charles Jenarius, who confirmed the PSP licence to his company said: “We are still putting our plans together and by the time we finalise, we will disclose to the public how we intend rolling out services with the PSB licence to further deepen the CBN financial inclusion strategy.
“With the PSB licence, we will be able to prove to Nigerians that we have the capacity to lead cashless policy initiative of the CBN.”

Also, the Executive Director, Regulatory and Corporate Affairs at 9mobile, Mr. Abdulrahman Ado, said 9PSB would operate as an independent entity as mandated by the CBN, inherit a rich legacy of value driven practice in service delivery focused on excellence in service quality, innovation and customer experience.

According to him, “9mobile applied for the PSB licence to enable it drive financial inclusion using its wide agent network and extensive experience in operating in rural/underserved areas, to provide financial services to low income groups who are typically financially excluded and transact almost exclusively in cash.”

According to Adebayo “Digital money is the way to go, Nigeria has the infrastructure to drive it through the robust nature of telecoms networks across the country, but Nigerians also need to grow beyond sentiments in the introduction of cashless policy.”

The central bank had explained that the AIPs were in line with its objective of enhancing financial inclusion and the development of the payment system by increasing access to deposit products and payments services through a secured technology-driven environment.
The Director, Corporate Communications Department of the CBN, Isaac Okorafor, had also said the approval in principle was part of the processes the institutions had to fulfil in order to be granted license to operate as fully-fledged PSBs.

According to Okorafor, the decision of the CBN to issue the AIP to the applicants followed the institutions’ satisfaction of documentation and other laid down conditions.
Sequel to the issuance of the AIP to the three banks, he said they were expected to submit their respective applications for the grant of a final licence, not later than six months after the AIP.
Speaking further, he disclosed that the CBN code of corporate governance for banks would also be applicable to the PSBs.

The CBN had in the last quarter of 2018, unveiled the operational guidelines for PSBs. The move was in furtherance of the Bank’s mandate of promoting a sound financial system and enhancing access to financial services for low income earners and unbanked segments of the society.
The PSBs are to operate mostly in the rural areas and unbanked locations, targeting financially excluded persons, with not less than 25 per cent financial service touch points in such rural areas as defined by the CBN from time to time, the guidelines said.