• Saturday, April 13, 2024
businessday logo

BusinessDay

MTN mobile money ahead across Africa, awaits Nigeria license

MTN commences sixth phase of ICT, business skills training for SMEs

In its full-year report, MTN says it now has over 57 million mobile money users in Africa putting the telco ahead of closest rival Safaricom which has 52 million users as of March 2022.

While MTN is awaiting final approval from the Central Bank of Nigeria (CBN) for a Payment Service Bank (PSB) licence, the telco said it has seen fintech revenue growth of $1 billion representing a 30 percent increase year-on-year.

The number of active MoMo users rose from 10.4 million to 56.8 million compared to December 2020, generating a monthly average revenue per user (ARPU) of $1.3 billion. The value of MoMo transactions went up by 56.8 percent to $239.4 billion and 10 billion transactions were processed, up 41.1 percent year-on-year. On the other hand, Safaricom’s MPesa recorded $192.9 billion in value of transactions and 11.6 billion transaction volume.

In 2018, MTN disclosed its ambition to become the largest digital banking platform in Africa by growing its mobile money vertical into a 60 million customer business.

“We will be the largest bank in Africa, leveraging scale, network, brand, infrastructure, and distribution,” Rub Shuter, the then MTN Group CEO had said in an interview. That same year the telco applied for a mobile money licence in Nigeria and had expected that by 2019 it would launch the service in Nigeria. But that plan did not materialise. Instead, in 2020 the CBN announced it had granted MTN a Super Agent licence and was followed by an Approval-in-Principle (AIP) for PSB licence in 2021.

With the super-agent licence, MTN said it now has approximately 770,000 registered MoMo agents. The number of active merchants accepting MoMo payments was up 78.3 percent YoY at 785,147 and the total value of MoMo merchants payments (gross merchandise value -GMV) expanded by 66.5 percent to $13.3 billion.

Read also: MTN group restores dividend, hints at higher payout for 2022

The final approval for PSB licence is likely to take more than 6 years going by Globacom and 9Mobile which got theirs a year after an AIP was granted them. However, MTN is pushing up the restructuring of its fintech division.

Karl Toriola, CEO of MTN Nigeria told BusinessDay that the company’s plan to separate its fintech division from the traditional telecom business will likely be completed in 2022. In a statement, the telco has now set June as the timeline for completion of the separation. After that, the company will look for minority investors in a move to maximise growth in the division.

“The work to structurally separate the fintech business is progressing well and now aimed for completion by the end of Q2 2022. We were pleased to have secured the approval in principle for a Payment Services Banking licence in Nigeria in November 2021,” said Ralph Mupita, Group CEO, MTN. “

MTN’s fintech business is segmented into mobile banking agents, payments, remittances, loans, and insurance. MoMo the mobile money which captures the different segments, is now in 16 markets.

While the payment segment is booming, the telco has also increased its push into lending. According to the financial report, BankTech, the platform for lending, has facilitated a total loan value of $1.1 billion representing a 47.4 percent growth YoY. Within Insurtech, the telco’s insurance product aYo recorded more than 16.1 million registered policymakers and 6.3 million active policies (up 5.6 percent YoY). In total, aYo generated $8 million in service revenue and $12.5 million in premium income.

In line with its Ambition 2025, MTN plans to grow its fintech business to contribute at least 20 percent of the Group service revenue by 2025.

“We remain focused on executing on Ambition 2025, driving growth, deleveraging the Holdco balance sheet, and unlocking value. We are seeing accelerated growth sustaining at structurally higher levels, underpinned by data and the prospects for our platforms such as fintech,” Mupita said.