African telecommunications giant MTN has announced plans to acquire a banking license in South Africa to enhance its financial services.
This decision, made public on December 16, 2024, comes as the South African Reserve Bank (SARB) prepares to open its national payments system to fintechs and non-banking entities.
Read also: MTN, GTBank, Air Peace probed over poor service, exploitative pricing claims
Expanding financial services
MTN’s existing service, MTN Mobile Money (MoMo), allows users to perform basic transactions like payments and money transfers. However, due to regulatory constraints, it currently operates under a partnership with African Bank.
With a banking license, MTN intends to offer a broader range of financial products, including savings accounts and loans.
CEO Ralph Mupita stated, “Acquiring a banking license will enable MTN to provide a broader range of financial services… It’s the next logical step in our strategy to drive financial inclusion”.
Aiming for Financial Inclusion
MTN’s push into banking is a significant move toward addressing financial exclusion in South Africa. Many individuals lack access to traditional banking services, particularly in rural areas.
Read also: MTN’s child safety campaign addresses online harassment and exploitation in Africa
By integrating banking into its mobile platform, MTN aims to provide affordable solutions tailored for underserved communities.
Tim Masela from SARB emphasised the need for innovation, stating, “We believe that we should move with the times and open up the system for the entry of non-banks”.
MTN entering banking could change South Africa’s financial environment if authorised. It would offer accessible banking services and promote market competition using its 30 million customers.