MTN Group will spin off its fintech operations in Nigeria, Ghana, and Uganda to facilitate Mastercard’s investment. The company’s mobile-money transactions have surged significantly, and the fintech unit is valued at $5.2 billion. Despite regulatory challenges in Nigeria, MTN is optimistic about growth and is considering network-sharing strategies.
MTN Group Ltd. intends to spin off its financial technology operations in Nigeria, Ghana, and Uganda in the first half of the year. This move aims to facilitate Mastercard Inc.’s acquisition of a minority stake in these growing fintech operations, according to CEO Ralph Mupita during a Bloomberg interview.
The increasing usage of mobile phones by Africa’s young, tech-savvy population fosters significant growth in fintech, allowing wireless carriers to tap into essential financial services. MTN’s mobile-money transactions surged by 35% in constant currency, surpassing $320 billion.
Mastercard seeks a stake valued at potentially $200 million in the fintech operations, which as a whole may be valued at $5.2 billion; specifics will be revealed post-deal. Operations in Uganda and Ghana are progressing, while Nigeria faces more regulatory challenges.
In addition, MTN is considering network-sharing deals, reflecting trends currently observed in European markets. The company, recognized as Africa’s leading carrier by sales, announced a dividend of 3.45 rand (0.19 cents) per share for 2024, exceeding the Bloomberg analyst estimate of 3.35 rand, with aspirations for a larger dividend of at least 3.70 rand this financial year.
MTN Group is reorganizing its fintech business in three African markets to enable Mastercard to acquire a stake valued at up to $200 million. The move reflects the growing relevance of mobile finance services on the continent, marked by significant transaction increases. While Uganda and Ghana progress well in this separation process, Nigeria’s complexities remain but do not hinder MTN’s growth strategy, which includes potential network sharing initiatives.
Original Source: businessday.ng
