Telecommunications company MTN Uganda plans to separate its financial technology division, with ambitions for an individual stock market launch within a 3-5 year timeframe.
In a significant development for the fintech sector in Uganda and the broader African context, MTN Uganda has announced plans to list its mobile money and fintech division as a standalone business on the Uganda Securities Exchange (USE) within the next three to five years. This move is part of MTN Group's broader strategic shift to separate its fintech arms from telecom services across Africa, allowing these businesses more freedom to grow, innovate, and raise capital independently.
According to Sylvia Mulinge, CEO of MTN Uganda, the separation of the fintech division signals a strategic shift towards focusing on digital financial services. The new entity, MTN Mobile Money Uganda, will operate independently from MTN Uganda's core telecom business, but will be majority-owned by MTN Group Fintech Holdings B.V, the fintech investment arm of parent company MTN Group (based in South Africa).
The decision to carve out the mobile money and fintech division follows shareholder approval and aligns with Uganda’s National Payment Systems Act 2020, which requires mobile money operations to be independent from core telecom services. The move aims to unlock higher market valuation and value creation by positioning fintech as an independent entity with transparent financial reporting, facilitating capital raising and partnerships, enhancing corporate governance and operational efficiency, and ensuring regulatory compliance.
The fintech unit has demonstrated strong revenue growth, contributing significantly to MTN Uganda’s total service revenue. In the past year, it has shown a growth of 18.4%. The listing on the USE is expected to open doors to fintech partnerships, fundraising, and higher market valuations while maintaining majority ownership within MTN Group Fintech Holdings.
Before listing, MTN Uganda is securing regulatory approvals from the Bank of Uganda, Capital Markets Authority, and Uganda Revenue Authority, and will provide exit options to retail investors upon approval. The primary competition for the new fintech entity will still be the local unit of Bharti Airtel, owned by India's Bharti Enterprises.
The surge in popularity of mobile money services across Africa has been used for various purposes, including utility bills and transport fares. Mobile money has become a backbone of financial inclusion across the continent, with MTN Uganda, the largest telecom operator in Uganda, having approximately 21 million mobile subscribers.
MTN has been steadily positioning its fintech operations as a core growth driver beyond voice and data. The listing of MTN Mobile Money Uganda on the USE marks a significant development in the fintech sector in Uganda, reflecting the growing scale and importance of fintech services in Africa. The new entity aims to create a distinct fintech entity capable of faster growth and innovation, complying with regulatory requirements and unlocking shareholder value in Uganda's fast-growing digital payments market.
[1] MTN Uganda Press Release, [Date] [2] The East African, "MTN Uganda to list mobile money unit on USE", [Date] [3] Financial Times, "MTN Uganda plans listing of mobile money unit", [Date] [4] Bloomberg, "MTN Uganda to List Mobile Money and Fintech Division on USE", [Date]
- The separation of MTN Uganda's mobile money and fintech division marks a strategic move towards focusing on digital financial services and investing in technology, with the goal of growing, innovating, and raising capital independently.
- The listing of MTN Mobile Money Uganda on the Uganda Securities Exchange is expected to facilitate partnerships and fundraising, and allow the company to comply with regulatory requirements, enhance corporate governance, and unlock shareholder value in Uganda's fast-growing digital payments market.
