Telecoms play Airtel Africa (LSE: AAF) has soared 10% on Friday. That came after its sealed approval to launch banking operations in Nigeria. The former penny stock struck new all-time highs of 124.5p per share earlier in the session.
Airtel Africa provides mobile telecoms services in 14 African countries as well as mobile money services. It said its subsidiary SMARTCASH Payment Service Bank Limited had received approval in principle to operate a payment service bank business in Nigeria.
Final approval is subject to Airtel Africa meeting certain conditions within six months.
Commenting on the news, chief executive Segun Ogunsany said: “The final operating licence will enable us to expand our digital financial products and reach the millions of Nigerians that do not have access to traditional financial services.”
Why it’s a big deal
Airtel Africa’s Airtel Money division offers customers variety of services including payment services, loans, savings and international money transfers. It’s a field that’s enjoying breakneck growth. This is due to low levels of banking product penetration on the continent and rising wealth levels.
Revenues at Airtel Money rocketed 42.7% in the six months to September, to $259m. This helped pull turnover at group level 25.2% higher to $2.27bn.
Today marks the latest chapter in Airtel Money’s expansion story. In early October the business announced a new partnership with African payments company, Flutterwave, to expand its money division across East Africa. That deal will allow customers in Tanzania, Zambia, Malawi, Kenya and Rwanda to receive and make payments from and to Airtel Money customers.