Customers of telecommunication company, Airtel Africa, will soon be able to request for loan from Ecobank after the network provider and the lender reached an agreement. Such partnership is not the first of its kind as Diamond Bank (now Access Bank) and MTN Nigeria also have a partnership.
The partnership between Airtel Africa and Ecobank Transnational Incorporation (ETI) is for the network provider’s Airtel Money service which the company is also planning to offer in Nigeria after the Central Bank of Nigeria (CBN) approved the operation of the telecoms firm as a mobile money operator. MTN Nigeria has already started its Mobile Money service in Nigeria, called MoMo.
According to a statement on the Nigerian Stock Exchange (NSE), which was seen by Nairametrics, the partnership is still subject to regulatory approval. This partnership opens both companies to a wider audience as Airtel Africa currently operates in 14 countries, while Ecobank operates in 33 countries across Africa as well.
Why this matter: The deal is expected to create more access to financial opportunities for those in need of capital, and also provides a payment platform for both companies’ customers. In Nigeria alone, Airtel has about 47.7 million users. Although, the customer size of Ecobank in Nigeria is not publicly stated, the lender is spread across a number of locations across Africa, while Airtel has aa large customer base across Africa as well.
Aside the access to funds, the partnership will enable the customers perform various mobile transaction between them, including product savings, international and domestic transfers. It was also stated that Ecobank account holders will be able to make bulk disbursements, such as payroll payments, directly into Airtel Money customer wallets. Also, Ecobank will issue both virtual and physical debit and pre-paid cards to Airtel Money customers.
Partnership douse fear of bank future: The partnership comes at a period banks are being tipped to lose their position and customers in banking to Fintech companies. The partnership between Airtel and Ecobank shows that two organisations cannot do without the other if the CBN is to deepen financial inclusion within the country.
The future of banks have been wavering amidst the advancement of technology. Technology has expanded the service of banks beyond the grip of lenders, and other non-banking players have begun to spring up to cater to the underbanked or unbanked across Nigeria. But regardless of the job loss projected to happen in the next two to three years, banks and network providers – who are driving the next set of Fintech – need each other if they are to catch up or remain on the heels of technology advancement.
Speaking on the partnership, the Chief Executive Officer of Airtel Africa, Raghunath Mandava, said, “This partnership is a further demonstration of Airtel Africa’s commitment to provide affordable, simple and innovative solutions for our customers across Africa. We will continue to offer locally relevant M-Commerce solutions with partners like Ecobank in order to enhance the daily lives of our customers.”
Meanwhile, the CEO of Ecobank, Ade Ayeyemi, said, “We believe that financial inclusion can ultimately contribute to economic development, collaborating with major telecommunications providers in Africa is therefore a key strategic driver towards closing the gap between the banked and the unbanked.
“Hence, this partnership with Airtel Africa which makes Ecobank financial services available to any Airtel line registered on Airtel Money. In our markets where regulatory approvals are in place. This potential exensive reach will further provide convenience to customers, intra-country and particularly for cross-border transactions and remittances across Africa.” Ayeyemi concluded.