By Chijioke Ohuocha
ABUJA, Aug 31 (Reuters) - Nigeria's central bank said it
will grant more licences for payment service banks but set a
minimum capital base of $13 million, which could deter telecoms
firms and some other potential new entrants to the digital
financial services sector.
The central bank in a circular seen by Reuters on Monday
said that telecom firms, banking agents, retail chains and
postal services could apply for licences to become payment
banks. To do so they must set up a separate company for it with
a minimum capital of 5 billion naira ($13 million) and run it as
an independent entity from their existing operations.
The bank has granted three licences so far to 9PSB, a unit
of local telecom firm, 9mobile, and two others.
Nigeria wants to open up its digital financial services
sector, which will help millions of Nigerians who do not have
bank accounts. But regulation has been caught up with intense
lobbying from lenders seeking to protect their turf in the wake
of intense competition and weakening asset quality.
MTN MTNN.LG MTNJ.J , Nigeria's biggest telecoms firm,
which is yet to receive approval, last year launched a mobile
money transfer service, targeting those without bank accounts in
a bid to secure the central bank's approval for a payments
licence. More than half of Nigeria's population of 180 million do not
have a bank account.
The success of mobile money in east Africa has convinced
investors and the industry that financial services are the next
growth area for the telecoms sector, where prices for basic
services are falling.
But the licensing requirement in Nigeria risks putting off
telecom companies. When the central bank issued preliminary
guidelines for payment banks in 2018 for discussion, telecom
companies argued that they are not banks and do not need a
capital base.
The central bank said in its circular that it could ask
payment banks to recapitalise for specific risks.
Payment banks should operate mostly in rural areas and
unbanked locations, accepting deposits from individuals and
small businesses, the central bank said. They cannot grant
loans, it said.
($1 = 380.70 naira)