With a very high telephone penetration rate in several countries, mobile money has a bright future on the African continent.
During its general assembly held in July 2020, mobile telephone company, MTN Cameroon, decided to increase the share capital of Mobile Money Corporation (MMC) to 850 million CFA francs, a decision that laid the groundwork for the mobile banking segment in Cameroon.
The South African giant by this act, adheres to the regulations of the Central African Banking Commission (Cobac) relating to the prudential standards applicable to payment institutions, the texts of which in their article 2, stipulate that “the share capital minimum released from payment institutions is set at five hundred million CFA francs ”.
This is a basic amount that allows any service provider to perform payment services such as payments and withdrawals and cash withdrawals from a bank / payment account, direct debits, transfers or even credit banking.
Reports say the South African operator is currently developing a platform that will allow it to offer loan and savings services to its Mobile Money customers. To that effect, MTN Cameroon has already signed agreements with several microfinance institutions in Cameroon.
“The operator will only act as an intermediary for transactions. In concrete terms, the microcredits granted via mobile Mobile Money will not come from the operator’s funds, but from microfinance banks for savings ”, one of its officials said.
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Note that since the adoption, on January 1, 2019, of the Cemac regulation relating to the payment service, payment services are no longer the preserve of credit and microfinance institutions. Mobile telephone operators can now constitute themselves as service providers via subsidiaries.
However, providers can only provide their services through a bank and need the bank to meet regulatory requirements
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer