Financial conglomerate MTN Group takes a step forward in its fintech goals, receiving approval for the separation of MoMo in Uganda.
MTN Group Separates Fintech and Mobile Money Operations
In a significant move towards accelerated growth, efficiency, and better service delivery, MTN Group has announced the strategic separation of its fintech and Mobile Money (MoMo) businesses from its GSM (telecommunications) businesses. This decision is part of the company's Ambition 2025 strategy, which aims to be 'leading digital solutions for Africa's progress'.
At an extraordinary general meeting (EGM) in Ghana in May, MTN Ghana outlined plans to restructure its MoMo subsidiary in line with national financial regulations and the Group's strategy. The same process is expected to be implemented across multiple listed subsidiaries of MTN Group.
The separation aims to provide a more focused approach to both the fintech and MoMo businesses and the GSM businesses, enhancing their growth and development within MTN Group. This move enables MTN’s fintech arm to evolve as a dedicated entity that can deliver tailored financial solutions with faster innovation cycles and stronger regulatory alignment, ultimately unlocking greater value both for customers and shareholders.
MTN Uganda, the first listed subsidiary of MTN Group to seek and secure shareholder approval for the structural separation of the fintech business, saw an approval rate of 99.9% at an EGM on Tuesday, 22 July. This approval is in line with statutory requirements in Uganda, which seek to support the growth of digital services.
In 2024, the MTN Group served more than 63 million active monthly MoMo users in 14 of its 16 markets. More than 20 billion transactions worth in excess of US$320 billion were carried out through MTN Group's MoMo services that year. The separation is expected to improve the efficiency and service delivery of the GSM businesses within MTN Group.
Ralph Mupita, the President and Chief Executive Officer of MTN Group, highlighted the importance of this strategic separation, stating that it forms a key part of MTN Group’s platform strategy under Ambition 2025. The move is expected to create a more streamlined and efficient operational structure within MTN Group, ultimately leading to a more focused approach to delivering digital solutions for Africa's progress.
The completion of the transaction in Uganda remains subject to regulatory approvals and other customary conditions. Similar processes will be followed at other listed subsidiaries in due course. The separation is expected to enhance the growth and development of the fintech and MoMo businesses within MTN Group, driving accelerated scale, efficiency, and better service delivery to customers.
[1] MTN Group Press Release: Structural Separation of Fintech and Mobile Money Businesses
[2] MTN Uganda Press Release: Shareholders Approve Structural Separation of MTN Mobile Money (U) Limited
[3] Business Daily Africa: MTN Uganda shares soar after fintech unit separation approval
[4] ITWeb Africa: MTN Group separates fintech and MoMo businesses from GSM operations
- The strategic separation of fintech and Mobile Money operations by MTN Group, as outlined in their Ambition 2025 strategy, aims to provide a more focused approach for both the fintech and MoMo businesses and the GSM businesses, leading to accelerated growth, efficiency, and improved service delivery.
- In a significant move towards better regulatory alignment and faster innovation cycles, MTN's fintech arm is expected to evolve as a dedicated entity following the separation, with the aim of delivering tailored financial solutions for its customers and shareholders.
- The financial industry and business communities have shown support for the strategic decisions made by MTN Group, as evidenced by the 99.9% approval rate at an EGM for the separation of the fintech business in MTN Uganda.
