The Central Bank of Nigeria (CBN) has decided to issue more licences for firms looking to set up payment service banks if they have a minimum capital base of $13m, Reuters has reported.

Currently, over half of the 180 million Nigerians do not have a bank account.

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Through this policy change, the central bank intends to bring millions of unbanked Nigerians under the banking net by opening up the digital financial services sector.

However, the latest move may end up preventing telecom firms and other potential new entrants from entering the industry, the report added.

In a circular, CBN said that telecom companies, banks, retail chains, and postal services can set up a payments bank by applying for licences.

However, to secure a licence, they need to set up a separate independent entity with NGN5bn ($13m) in minimum capital.

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So far, 9mobile’s local telecom unit 9PSB, and two other companies have secured mobile money licences from the central bank.

Nigeria’s biggest telecom company MTN had launched a mobile money transfer service last year for the unbanked population.

The company has applied for a payments licence, however, it is yet to receive approval from the central bank.

Back in 2018, when the CBN issued preliminary guidelines for payment banks, telecom companies disputed that as they are not banks, they do not require a capital base.

Since Nigeria’s licencing requirement risks putting off telecom firms, the central bank said it could urge payment banks to recapitalize for specific risks.

CBN added that payment banks must operate in rural and unbanked locations and accept deposits from individuals and businesses but they cannot lend money.