The Central Bank of Nigeria (CBN) has awarded Airtel Mobile Commerce Nigeria Ltd, a subsidiary of Airtel Africa, a full super agent license to operate in Nigeria.
Airtel Africa, a leading provider of telecommunications and mobile money services with presence in 14 African countries, has made strategic insteps to solidify its presence in Nigeria. Following the CBN’s license-in-principle approval awarded to the telecommunications giant in November 2021, it announced that Airtel Nigeria has gained a full super agent license.
This license to operate a super agent license comes two weeks after the apex bank granted MTN Nigeria final approval to operate its Momo Payment Service Bank Limited.
What does this mean?
According to the report tagged ‘New Data from EFInA’ by Enhancing Financial Innovation & Access (EFInA, 2020) about 38 million adults were completely financially excluded. Although financial inclusion has grown in the past decade,
Nigeria fell short of the National Financial Inclusion Strategy targets for 2020. It had hoped to reach 70% of Nigerians with formal financial services by 2020 but achieved a target of 51%.
Another target Nigeria had hoped to achieve was an overall financial inclusion of 80% of its adult population by the end of 2020. Data from EFInA shows that only 64% of its adult population has access to financial services by the end of 2020.
Building on this, super agents are businesses that are licensed by the CBN to recruit agents for agency banking, which involves providing financial services to communities on behalf of the banks in order to increase financial inclusion.
In other words, Airtel Nigeria’s super agent license allows it to create an agency network that can service the customers of licensed Nigerian banks, payment service banks and licensed mobile money operators in Nigeria.
While they should not be mistaken with payment service bank and traditional bank offerings, a super agent can drive financial inclusion through cashless transaction restricted but has limited cashless transactions it can perform. Super agents and PSBs have one major goal in common - financial inclusion, especially for the unbanked in Nigeria.
Takeaway
Although predicting and drawing conclusions can be too early, the figures show the success rate Telcos have is currently higher than any bank in connecting with the locals. They are more established in the local communities and have agents scattered across many local governments in different states of the country. This leverage may likely allow telecoms financial service subsidiaries to engage the local communities as Super Agents or PSBs easily than banks will.
Thoughts?
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