Telcos eye financial services play

TELECOMMUNICATIONS COMPANIES TELCOS in Nigeria are putting machineries in place to be able to provide financial services under the new payment service banks (PSB)

TELECOMMUNICA TIONS COMPANIES TELCOS in Nigeria are putting machineries in place to be able to provide financial services under the new payment service banks (PSB) initiative introduced by the Central Bank of Nigeria.

As part of measures to further deepen financial inclusion in Nigeria and achieve the 2020 target, the CBN had recently announced plans to start granting operating licence to payment service banks (PSBs), which would operate in rural and unbanked areas.

Specifically, the CBN has released an exposure draft on the guidelines for licensing and regulation of the PSBs with a minimum capital base of N5 billion and a N2 million licensing fee.

PSBs are meant to enhance financial inclusion in rural areas by increasing access to deposit products and payment as well as remittance services to small businesses, low income households and other entities through high volume, low value transactions in a secured technology driven environment.

Consequently, the telcos, including Glo, 9Mobile, Airtel, MTN Nigeria and Ntel, according to reports have come together under the aegis of Association of Licensed Telecommunications of Nigeria (ALTON) to set up what they termed ‘Telecommunications Financial Inclusion Committee.’

The committee currently is focused on studying the exposure guidelines for the licensing and regulation of PSBs in order to take position and play in the new space.

Indeed, the CBN and telecommunications regulator, Nigerian Communications Commission (NCC) had in April signed a memo- randum of understanding (MoU) towards leveraging the vast telecoms coverage to bring millions of hitherto excluded Nigerians into the financial system through mobile payment.

The MoU between the two regulatory bodies was the second in recent time as the duo earlier in November 2017 inked an agreement to enable digital mobile operators incorporate special purpose vehicles to offer mobile money services.

Speaking on behalf of the telcos, Gbenga Adebayo, ALTON chairman, commended CBN for coming up with the PSB initiative, describing it as a welcome development that will play a critical role in accelerating financial inclusion.

He said the telcos, in their drive to support the financial inclusion initiative of government, would explore every available window to render financial services to Nigerians.

On the committee set up by the telcos, he said: “The inauguration of this committee is a positive and necessary first step to achieving our goals of improving inclusion and literacy.

“We are focused on delivering sustainable solutions to achieve long-term results. The potential of our sector’s participation in these efforts is enormous. The telecommunications subscribers’ database is the most comprehensive, our coverage is vast and this speaks to the potential that we have as a group to truly contribute to solving some of the challenges that have been faced so far.”

Also speaking, Johnson Oyewo, representative of MTN and secretary of the committee, said: “Our job is to ensure that our industry contributes effectively to financial inclusion and literacy in Nigeria. This committee is being inaugurated at an opportune time with the recent announcement by the CBN, allowing for an inclusive model that encourages all players to contribute towards driving financial inclusion in the country.”

Kevin Amugo, CBN director, financial policy and regulation, in a letter to banks, telecommunications companies, mobile money operators, banking agents and the Nigerian Communication Commission (NCC), said the PSB licensing was in its efforts at promoting financial inclusion and enhancing access to financial services for low income earners and unbanked segments of the society through leveraging on technology.

“In view of the challenges to effective outreach to rural communities as well as the need to complement the services provided by other licensed entities, the CBN issues this draft regulation to provide for the licensing and operations of PSBs in Nigeria.

“PSBs are expected to leverage mobile and digital services to enhance financial inclusion and stimulate economic activities at the grassroots through the provision of financial services. PSBs will also enable high volume low value transactions in remittances services, micro savings and withdrawal services in a secured technology driven environment.”

We are focused on delivering sustainable solutions to achieve long-term results