Fintech ventures of MTN Group get a boost as Ugandan regulatory approval is secured for the separation of MoMo, their mobile money operation.
The MTN Group, a leading telecommunications company in Africa, has announced the approval of the structural separation of its Mobile Money (MoMo) business in Uganda. This move is part of the company's Ambition 2025 strategy, which aims to lead digital solutions for Africa's progress.
In a historic decision, shareholders of MTN Uganda, at an Extraordinary General Meeting (EGM) held on Tuesday, 22 July, approved the separation by a staggering 99.9%. This approval marks the first step in the separation of the fintech and MoMo businesses from the Group's GSM operations.
Ralph Mupita, President and Chief Executive Officer of the MTN Group, has overseen the first approval of a structural separation of the fintech business from an MTN subsidiary. The separation is designed to allow the fintech and MoMo units to operate with greater strategic and regulatory clarity, unlocking value for shareholders by offering distinct investment opportunities in telecom and financial services.
The separation is significant for the growth and development of the fintech and MoMo businesses within MTN operations. It facilitates focused growth and regulatory compliance for these businesses, which often operate under different financial regulations than telecoms. The separation also allows MTN’s fintech unit to attract fintech-specific investors and potentially list separately on local stock exchanges, enhancing capital market access and shareholder value.
By unbundling these businesses, MTN can accelerate scaling of digital financial services independently while maintaining its core GSM business. This strategic move reflects a broader trend across African telecoms, where carving out mobile money and fintech arms unlocks value and sharpens strategic focus.
In 2024, the MTN Group carried out over 20 billion transactions worth in excess of US$320 billion. The Group served over 63 million active monthly MoMo users in 14 of its 16 markets. The completion of the transaction in Uganda remains subject to regulatory approvals and other customary conditions.
The strategic separation of fintech businesses is expected to be followed at other listed subsidiaries of the MTN Group. Scancom PLC (MTN Ghana) has outlined plans to restructure its MoMo subsidiary in line with national financial regulations and the Group's strategy.
The separation and restructuring processes are part of the MTN Group's Ambition 2025 strategy, which focuses on leading digital solutions for Africa's progress. This approach supports MTN’s ambition to better serve the growing digital economy and drive accelerated scale, increase efficiency, and improve service delivery to customers.
The separation is considered an important milestone in the Group's strategic evolution and delivery of its platform strategy. It is a step towards enabling the fintech and MoMo businesses to grow more nimbly and efficiently, ultimately enabling the MTN Group to better capture opportunities in Africa’s expanding digital economy.
[1] MTN Group. (n.d.). MTN Uganda Limited. Retrieved July 25, 2023, from https://www.mtn.co.ug/
[2] MTN Group. (n.d.). Investor Centre. Retrieved July 25, 2023, from https://www.mtn.com/investor-relations/investor-centre/
- The separation of MTN Uganda's MoMo and fintech businesses from the Group's GSM operations signifies a strategic shift in African finance, marking the beginning of a new era for the fintech industry within the MTN Group's business.
- The strategic move to separate the fintech and MoMo units from the core telecom business aims to provide these entities with greater strategic and regulatory clarity, ultimately unlocking value for shareholders and offering distinct investment opportunities in both telecom and financial services.
- The growth and development of the fintech and MoMo businesses within the MTN Group will be facilitated by this separation, allowing for focused growth, regulatory compliance, and the potential to attract fintech-specific investors, which could lead to separate listings on local stock exchanges and enhanced capital market access.
