MTN seeking investors for fintech unit
MTN Group Ltd will seek minority investors in its African fintech unit after it spun off the division from the operator’s traditional telecoms business, a move aimed at maximizing growth for the burgeoning division.
The continent’s largest mobile operator is on track to complete the carve-out by the end of June, according to a statement on Wednesday. A similar move for the fiber network division is at an earlier stage and will be finalized next year.
“We will be working on onboarding strategic partners in the fintech space in the second half of the year, which can help us accelerate the growth of this business,” chief executive Ralph Mupita told reporters. after announcing an increase in annual profits.
The Johannesburg-based company’s plans will likely be boosted by the expected formal approval of a mobile banking license in Nigeria, its biggest market, which will allow MTN to offer financial services to millions of new customers. The group’s mobile money transactions soared 57% last year to $24 billion.
MTN shares rose 3.4% at 9:40 a.m. in Johannesburg, extending a frenzied run that recently saw the stock hit seven-year highs. The company has resumed paying dividends and said payments will rise to R3.3 per share this year, from R3 in 2021.
Telcos in Africa are working overtime to accelerate fintech operations in a continent that is lagging behind in a rapid transition to digitization from basic mobile use of voice and text. Mobile payment systems have been a particular hot spot, sparking a wave of fast-growing startups including Flutterwave Inc. in countries like Nigeria, Africa’s most populous country with around 200 million people.
MTN’s rivals, including Airtel Africa Plc, Nairobi-based Safaricom Plc, and South Africa’s Vodacom Group Ltd, are all at different stages of this transformation, with the overall aim of separating and monetizing businesses in the longer term. term.
Last year, Airtel tapped Mastercard Inc. as an investor in its mobile money unit. India’s Jio Platforms Ltd, the digital arm of billionaire Mukesh Ambani’s Reliance Industries Ltd, set a precedent by attracting capital from Facebook Inc. and Silver Lake Partners in 2020.
Helios Investment Partners LLP, an Africa-focused private equity firm, said in an interview in January that it was in talks with telecom operators on the continent and banks about mobile money deals. and digital payments.
SOURCE: The Bharat Express News