MTN Bank: “Enter the Dragon”

 

By Oji Odu

Still battling to free itself from the noose of N1.04 trillion fine in 2015 for refusing to deactivate unregistered lines, later reduced to N330 billion, and which it yet to fully redeem, $8.1 billion fine for illegal repatriation of said amount between 2007 and 2015 and $2 billion in tax arrears, the decision of South Africa’s telecommunications giant and largest telecommunications operator in Nigeria to delve into the banking sector has raised gave concerns.

Under what basis does she want to go head to head with the traditional banks? What is its success story in Nigeria to qualify it for a banking license? For a foreign telecommunications firm noted for running battles with constituted authorities over shady operations, illegal activities and flouting the laws of the country, what actually is its target for embarking on this new venture, even after decrying poor business environment of Nigeria? Why has it stopped the banking services in South Africa for two years now?

The decision by MTN to delve into the banking sector followed that by the Central Bank of Nigeria (CBN) to drive financial inclusion by 2020 which would allow telecommunications firms to provide banking services and give millions of Nigerians without bank accounts access to the so-called mobile money services which has been successful in Kenya.

“We will be applying for a payment service banking licence in Nigeria in the next month or so, and if all goes according to plan, we will also be launching Mobile Money in Nigeria probably around Q2 of 2019,” Rob Shuter, the company Chief Executive Officer (CEO) said.

According to MTN, the company would launch the service in a country because over 60 percent of the 115 million Nigerian population, or 60 percent of the population, does not have a bank account, according to the World Bank.

“It’s a huge opportunity for MTN,” said Byron Lotter, fund manager at Vestact, which owns shares in MTN. “The problem is they are being held hostage by this $10.1 billion demand because their business is too big to leave.”

Shuter, who has led MTN since last year, also said the company would relaunch mobile money services in South Africa, two years after canning the service. However not giving details about its  plans to re-launch mobile money in South Africa, he revealed that the South African market that has proved difficult to crack because around 80 percent of the population already have access to traditional bank accounts.

The CBN guidelines addressed to telcos, mobile money operators, banking agents, and the NCC for the payment service banks, as at October 2018, include a N2 million non-refundable license fee and N5 billion capital base. With MTN’s indication of interest in Payment Service Banks (PSB) it is believed that others operators in the country will follow.

Speaking to the Magazine in a chat, Finance expert, Peter Ojuks said: “ It is a pity that upon MTN’s challenges and face-off with government, including its complains about Nigeria’s discouraging business environment, the South African firm wants to start banking services which have not worked for it in its home town.

“ There are fears that it will continue with its rip-off policies of customers if granted the licence, just as it is notorious for poor telecommunications services, charging for unrendered services, unsolicited messages, frequent drop calls et cetera in the telecommunications sector.”

For Chisom Nnaemeka, a student, it further exposes the failure of the nations banking sector and its regulator. “ Though Personally, I don’t like how these networks, especially, MTN rip their subscribers off, the banks are no better in the customer rip-off syndicate whether with ‘Terms and Conditions Apply’ or not, he said.

Nnaemeka on the other hand believes that if the CBN handles it very well, it will be a good thing for the economy. “ It will encourage high level competition that will make the banks to sit up” he added.

However, Mrs. Bimbo Adesola, a petty trader expressed joy of the initiative, but had reservations on MTN’s involvement. “ How can they give lincense to MTN which everybody, including the government knows is stealing from the people? This is another license by government to MTN to kill Nigerians,” she lamented.

Akpan Udobong, a telecommunications expert opine that the business world is a free environment where one can engage in many legal businesses.“ For MTN, upon their many lapses and fraudulent activities,  they are supposed to be banned from banking business. But which telecommunication network is better?

“ Truth be told, they have also impacted on the nation and can be allowed. The problem lies on the regulators of the sectors. Who are careless or connive with them to rip-off their customers. This will continue if something tangible is not done to block the loopholes, and this good idea become the nations albatross,” he stated.