MTN wants 3 more investors to join MoMo as it looks to sell 30% of the fintech vertical

MTN Group has just revealed that it wants to add three more investors to MoMo, its fintech arm. This announcement comes a day after the telecom giant announced a major deal in which payments processor Mastercard agreed to acquire a minority stake in MoMo. MoMo is currently valued at a whopping $5.2 billion. 

Shedding light on the company’s next move regarding the deal, CEO Ralph Mutipa said “We are open to selling up to a maximum of 30% of the fintech business.” He then added that it would take three to four investors to actualize that goal. Seeing as MTN already has Mastercard in the bag, the likely number would be three. 

Mupita also highlighted the importance of mobile money services to Africans. “With mobile money and fintech services, you are able to leapfrog people from not having any financial services to using the phone to provide a lot of financial services,” he explained. MoMo currently serves over 46 million customers across 21 markets in both Africa and the Middle East. Mastercard’s investment, alongside that of the other parties, could unlock many growth opportunities for MoMo. 

It is worth noting that Mastercard acquiring a minor stake in MTN’s financial services vertical follows another deal with Airtel last week. The agreement between the payments processor and Airtel was to enable the latter’s customers to transfer funds across Africa.  

Cross-border payments are critical for the continent’s economy, but infrastructural challenges make it difficult to scale. First Airtel, now MTN, it appears Mastercard is on course to be entrenched in Africa’s emerging digital financial services segment. 

Read also: Mastercard to buy stake in MTN’s $5.2 billion fintech unit, MoMo

MTN’s role in Africa’s growing digital financial services landscape

Like Safaricom, Airtel, and other telcos, MTN has made significant investments in the digital payments sector. And for a good reason. Nowadays, phones can transfer funds, buy data, and carry out other basic functions. This means the ability to do the above seamlessly within one platform is in demand.

Africa’s mobile phone penetration has rapidly grown in recent years thanks to a relatively young population. The fact that more people are using phones makes it necessary to build solutions that they can access through that medium. According to this report, Africa grew its mobile money market value to $44.9 billion and $836.5 billion in transaction value respectively. 

Given these facts, it’s no surprise that many industry players are striving to bridge the gap between consumers and essential financial services. These players comprise traditional banks, fintechs, and telcos. mtn