MTN Group Ltd, a prominent telecommunications company in Africa, expresses readiness to potentially divest up to 30 percent of its flourishing fintech arm amidst a surge in transaction volumes.
MTN Group Ltd, a prominent telecommunications company in Africa, expresses readiness to potentially divest up to 30 percent of its flourishing fintech arm amidst a surge in transaction volumes. Despite encountering its largest profit decline in thirty years due to currency devaluation challenges in Nigeria, MTN witnessed a remarkable 32.2 percent increase in mobile money transactions, serving a user base of 72.5 million active MoMo service users.
CEO Ralph Mupita discloses plans for a second round of minority investment in the fintech division, emphasizing the company's willingness to relinquish a significant stake contingent upon appropriate valuation. "We are considering a subsequent round of minority investment in the fintech business," stated Mupita during a call with reporters. "We are prepared to divest up to 30% of the business at the appropriate valuation." MTN recently finalized a deal with Mastercard, valuing the fintech arm at USD 5.2 billion.
Amidst Africa's growing population of tech-savvy individuals increasingly embracing mobile platforms for financial transactions, the fintech sector emerges as a promising avenue for telecom giants like MTN to capitalize on.
MTN's strategic move mirrors a broader trend observed among its competitors such as Airtel Africa Plc and Safaricom Plc, who are also exploring digital transformation strategies to leverage the evolving market dynamics. Reflecting a broader industry trend towards monetizing digital services, Airtel Africa is considering a potential listing for its mobile-money business.
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