MTN Group announced its initial agreement with global payment behemoth Mastercard to divest a minority stake in its fintech arm. Striving to unlock value in its financial technology and payments division, MTN has been grappling with persistent power outages, compelling it to allocate substantial capital for backup power systems.
Read: vivo introduces its new eye-catching Y36 device in Mzansi
The telecommunications giant, the second largest in the country, disclosed the inking of a memorandum of understanding with Mastercard for a minority investment in its fintech arm. This strategic move values the fintech unit at approximately $5.2 billion, a considerable 40% of MTN’s total market worth.
A spokesperson from MTN stated, “We are pleased to announce that we have executed commercial agreements with Mastercard to support the acceleration and growth of our fintech business’s payments and remittance services.” The memorandum of understanding outlines the foundations of a minority investment by Mastercard into the group’s fintech business, pegging the enterprise valuation at $5.2 billion on a cash- and debt-free basis.
The definitive investment agreements are set to be finalized shortly, coinciding with the conclusion of customary due diligence procedures. The actual investment closure hinges on adhering to standard closing conditions.
MTN Fintech’s flagship mobile money service, MoMo, ranks among Africa’s most expansive mobile money platforms, boasting a staggering 281 million registered users. MoMo empowers customers to engage in money transfers, bill payments, airtime purchases, and other financial transactions. In addition to its robust mobile money offerings, MTN Fintech extends a spectrum of insurance products, spanning life, health, and property coverage, alongside lending services encompassing microloans and personal loans. The company’s portfolio is further enriched by remittance services, enabling cross-border money transfers to family and friends.
The essence of MTN Fintech’s mission resides in furnishing accessible and cost-effective financial services to its clientele across diverse markets. By leveraging technology, the company aspires to bridge the digital divide, propelling financial inclusion and accessibility throughout Africa.
