Tag: Fintech Solutions

MTN Group reported a resilient underlying operating performance for 2023 in the face of tough macro headwinds, declaring a total dividend of 330 cents per share. Inflation remained elevated in several key markets and the sharp devaluation of the Nigerian naira impacted reported results for both MTN Nigeria and MTN Group.

Amid sustained high demand for data and fintech services, MTN Group increased the number of active data subscribers by more than 9% to 150 million – half the total subscriber base – and active Mobile Money (MoMo) users by 5% to 72.5 million. Total subscribers increased to 295 million across the Group’s markets.

In the year to end-December 2023, data traffic on MTN’s networks (excluding joint ventures) grew by more than a third, with usage up to an average of more than 6GB per user per month. To sustain this growth, as well as network coverage and quality, MTN deployed capital expenditure (excluding leases) of R41 billion in the year.

The volume of fintech transactions also increased by around a third to 17.6 billion, with the value of transactions across the fintech platform up at US$272 billion, driven by growth of advanced services in payments, banktech and remittance solutions.

In South Africa, where the business faced loadshedding challenges, subsidiary MTN South Africa deployed R10 billion of capex to drive network capacity expansion and power resilience. More than R2.6 billion of this was investment in power and security resilience. By the end of the year, network availability across the entire network reached around 95%. For the sites where we had completed our resilience investment, we recorded network availability of more than 98%.

MTN South Africa reported solid growth in the consumer postpaid, enterprise and wholesale businesses. In the second half of the year there were also sequential improvements in the consumer prepaid business.

Strategic delivery
In the year, MTN Group made good strategic progress in the development of our fintech and fibre businesses. A key highlight was concluding an agreement for payment network processor Mastercard to invest up to US$200 million for a minority stake in MTN Group Fintech at a valuation of US$5.2 billion.

“We are excited about this partnership, particularly the commercial agreements, which we expect to support the accelerated growth of our fintech business,” said MTN Group President and CEO Ralph Mupita. “In 2023, we also advanced our work to structurally separate the fibre business, Bayobab, with engagements to secure regulatory clearances in key markets being the main priority.”

In the year, Bayobab and Africa50 partnered to develop Project East2West, a terrestrial fibre optic cable network to help bridge Africa’s connectivity gap by improving broadband access for the continent’s landlocked countries in particular.

Among the Group’s other strategic progress highlights were the 13.1% absolute reduction in Scope 1 and 2 emissions. This is part of our environmental commitment to reach Net Zero emissions by 2040. We also finalised the sale of MTN Afghanistan, which completed the Group’s exit of our consolidated subsidiaries in the Middle East.

Resilient results
In the year, MTN Group’s finances withstood a challenging external environment, marked by elevated inflation (averaging a blended 16.7%), forex volatility and paucity, and ongoing political tensions in some markets, most notably in Sudan.

In constant currency terms, MTN Group service revenue grew 13.5% to R210 billion, with data revenue making up R84 billion and voice revenue contributing R83 billion. Fintech revenue totalled R21 billion.

Earnings before interest, tax, depreciation and amortisation grew by almost 10% in constant currency terms to R90 billion. The Group delivered expense efficiencies of R2.6 billion and kept key debt ratios within covenant levels.

Outlook and priorities
Looking ahead, Mupita said MTN remained focused on executing on Ambition 2025: sustaining operational momentum, accelerating the platforms strategy, driving expense and capital efficiencies, and continuing to strengthen the balance sheet.

“We are anticipating that the macro conditions in our trading environment will persist in 2024, with naira volatility and elevated inflation the key challenges we will need to navigate. MTN plans to invest R35-39 billion in 2024 to position the company to capture the structural demand for data and fintech services across Africa,” he said.

“We maintain our overall medium-term guidance framework, however simplifying our objective for fintech,” Mupita said, adding that MTN was encouraged by the outlook for the fintech business, given the solid growth in advanced services. “The partnership with Mastercard positions the business well to scale faster and we are excited about the commercial launches of card issuance, acceptance and remittances across the footprint.”

• The partnership is set to launch a prepaid virtual card tailored for MTN’s MoMo customers, granting them access to over 100 million acceptance points worldwide
• Additionally, it will empower MoMo merchants to seamlessly accept card payments, enhancing the platform’s instant cross-border money remittance services and capabilities

Mastercard and MTN Group Fintech have signed a multi-market agreement that will set in motion a new era of collaboration to connect millions of people and small businesses across Africa with digital tools to transact through secure mobile payments, expanding access to the benefits of the cashless digital economy.

The partnership will use Mastercard’s cutting-edge technology and capabilities to support MTN’s ambition to become Africa’s largest fintech platform for both merchants and consumers. This follows Mastercard and MTN’s recent agreement for a minority investment into MTN Group Fintech – the digital financial services arm of Africa’s largest mobile network operator – that concluded this month.

With MTN’s overall subscriber base at 290 million and 60 million active monthly MoMo (Mobile Money) wallets, the agreement will impact 13 markets in Africa including Benin, Cameroon, Cote d’Ivoire, Eswatini, Ghana, Liberia, Nigeria, Republic of Congo, Republic of Guinea, Rwanda, South Africa, Uganda, and Zambia.

“Our innovation strategy is based on collaboration. We are very proud of our partnership with MTN that will enable digital commerce for millions of people in Africa. In addition, mobile money solutions can be greatly beneficial for SMEs, enabling growth through seamless commercial operations, wider payments acceptance, access to affordable credit, and secure digital tools,” said Amnah Ajmal, Executive Vice President, Market Development EEMEA, Mastercard.

Africa is home to over 1.3 billion people and only about 43% are banked with over 90% of all payments and transactions made via cash. And of the total population, 45% have mobile money accounts. Over the past five years, Mastercard and MTN have joined together to support several mobile money programs across Africa, helping people to make payments through global platforms, thus bringing more people into the financial mainstream.

“When there is a mutual vision – in this case to bring access, progress, financial inclusion, and prosperity to people – the road to partnership is a simple one. We look forward to working with Mastercard as a partner that is also committed to the enablement of more people and businesses through the collaboration into best-in-class apps, superior user experiences, safe transactions, secure remittances, new use cases, and expanded acceptance,” said Serigne Dioum, Group CEO, MTN Fintech.

The collaboration will help strengthen local infrastructure for digital payments, support potential expansion of transactions in the future and drive financial inclusion through access to assets.

Enabling global access for MoMo wallet users

A virtual and physical Mastercard companion card will be added to every MoMo wallet allowing users access to over 100 million acceptance locations globally enabling MTN to scale up internationally.

With this access, Mastercard will also be able to provide its cybersecurity solutions to MTN’s operations with the aim of increasing customer loyalty and trust.

Empowering SMEs with payment acceptance solutions

The agreement will enable SMEs with payments acceptance solutions such as Mastercard’s SME-in-a-Box, a low-cost payments solution that enables small business owners to move their businesses online and accept a range of digital payments from their customers.  

SME owners will now be able to access solutions with the opportunity to set up an e-commerce shopfront, including QR enablement, Tap on Phone solutions and digital card acceptance. This aims to further elevate customer experience, reduce business costs, and open new avenues for growth and innovation.

Expanding reach for remittance solutions

Through the partnership, consumers will now have expanded reach for mobile money remittance services – both inward and cross-border remittances in Africa. The demand for international remittance services is growing with more than US$2 billion in daily processed transactions, equivalent to more than 40% of the GDP of Sub-Saharan Africa. International remittances via mobile-money wallets grew by 65% year over year in 2020 to around US$1 billion, with no signs of slowing.

Mastercard is committed to its work with multiple telecommunications network companies across the continent and around the world, to make financial inclusion a reality. The company has pledged to bring 1 billion people and 50 million SMEs into the global digital economy by 2025. The work to provide MTN’s consumers and SME customers with easy and secure solutions, platforms and tools is just one example of work to deliver on this goal.

• Highlights MTN’s Ambition 2025 Strategy commitment, with strong emphasis on Fintech utilising the Ericsson Wallet Platform as a key channel for substantial growth.
• Agreement formalised during an executive visit by MTN Group to Ericsson Group HQ.

In the first half of 2023, MTN Group delivered resilient results, advanced our strategy by partnering with Mastercard on the MTN fintech business, and progressed plans to exit Afghanistan. This was achieved in a difficult operating environment marked by elevated inflation, weaker local currencies and regulatory developments across our 19 markets.

“We delivered a resilient performance in H1 23 and made good strategic progress against a tough macro backdrop,” said MTN Group President and CEO Ralph Mupita.

“In South Africa, we were very encouraged by the improved network availability on the back of our power-resilience investment, resulting in a stronger Q2 23 performance than Q1 23,” he said. By end-June, MTN South Africa’s network availability was more than 90% despite severe electricity shortages across the country.

“In Nigeria, we delivered a very strong operational result, having navigated the cash shortages in Q1 23 and increased inflation,” Mupita said. “The policy changes implemented in Nigeria in Q2 23 have short-term negative impacts, but we see these as being very constructive for the investment climate in the medium to longer term.”

MTN Group’s service revenue grew 15% to almost R108 billion in constant-currency terms. This was driven by increases in revenue from data services of 24% and from fintech services of 22%. Revenue from voice services increased 6% in the period. 

At the end of June 2023, we had 292 million subscribers with whom we worked to create shared value. This subscriber base – 4% higher than the same period last year – benefited from lower data rates and improved access to broadband services.

To facilitate the digital economy, we increased the number of active data users by more than 7% to nearly 140 million; reported a 19% increase in overall data traffic; and improved data affordability by reducing the average effective rate per megabyte by more than 22%.

We continued to invest in world-class networks and platforms for the people of Africa, committing R17.2 billion in capital expenditure in the first six months of 2023. The Group’s balance sheet remained strong, with all key metrics well within the limits of our loan covenants.

Driven by solid revenue growth and improved efficiencies, adjusted headline earnings per share (HEPS) increased by 25% to 749 cents and adjusted return on equity (ROE) expanded by one percentage point to 24.4%. These were in line with our medium-term guidance.

The MTN Group Fintech business delivered on our rapid expansion plans. The volume of transactions increased by 37% to 8.3 billion in the first half of the year. These were executed by 61 million active MoMo customers.

Following the bespoke process to identify and potentially introduce strategic minority investors into MTN Group Fintech, we executed commercial agreements with Mastercard to support the acceleration and growth of our fintech business’s payments and remittance services.

MTN and Mastercard also signed a memorandum of understanding which provides for a minority investment by Mastercard into Group Fintech based on a total enterprise valuation of about US$5.2 billion for the business on a cash and debt-free basis. Signing of the definitive investment agreements is expected to occur in the very near term as we approach finalisation of customary due diligence. The closing of the investment will be subject to customary closing conditions.

We continued to work to simplify our portfolio. The process for MTN Group to exit Afghanistan in an orderly fashion through the sale of our entire shareholding to Investcom AF, and affiliate company of M1, remains well on track. The transaction received conditional regulatory approval to proceed, pending the submission of relevant documentation to the Afghanistan Regulatory Authority.

Looking ahead, MTN will keep working to create shared value across our markets. “We are focused on the continued execution of our Ambition 2025, which remains relevant in the current macroeconomic volatility and presents attractive scope for growth,” said Mupita.

“As we manage the challenges in our operating environment, as well as the near-term impacts on our top-line and margins, we maintain our medium-term guidance.” 

MTN Group, a leading telecommunications company, is excited to announce the launch of its Open API Hackathon, inviting developers from multiple markets to participate in creating innovative mobile applications that utilize the MTN Mobile Money APIs for their respective markets.

This hackathon, organized by MTN Group Fintech, will be the third of its kind and will take place in the following 14 countries: Uganda, Ghana, Benin, Zambia, South Africa, eSwatini, Rwanda, Cameroon, Liberia, Guinea Conakry, Nigeria, South Sudan, Cote d’Ivoire and Congo B.

Developers participating in the hackathon will compete to design and develop a solution that goes beyond processing payments, incorporating additional features and functionalities that promote financial inclusion and literacy in their registered markets.

“MTN is dedicated to advancing financial and digital inclusion across the continent as part of our strategy to build a pan-African Fintech platform, driving the digital economy and fostering social and economic growth in Africa,” said Serigne Dioum, MTN Group Chief Fintech Officer.

Through the Open API Platform, MTN aims to harness the talent and creativity of Africa’s developers, enabling them to leverage the MoMo Platform and create opportunities for growth. The company firmly believes that collaborating with Africa’s talented individuals will expand the service offerings available on MoMo.

Key Details of the Hackathon:

• The challenge will run from July 31, 2023, to October 9, 2023.
• Developers will have five weeks to submit their innovative ideas for financial and transactional applications that incorporate MTN Mobile Money APIs.
• The mobile application must target consumers, merchants, or businesses, providing practical and valuable solutions that can be deployed in the developers’ registered markets. The applications should cover use cases beyond payment, leveraging MTN MoMo APIs.
• MTN in each participating country will select the top 12 applicants to advance to the prototyping phase.
• Preselected applicants will be required to develop a working prototype of their solution, and provide a live demo of their application to the adjudicators.
• Interested developers can find more information Momo Hackathon 2023
• Finalists stand a chance to win their share of USD 10,000 in prize money in their respective countries.

MTN Group looks forward to the innovative solutions that developers will create, driving financial inclusion and empowering individuals and businesses across Africa.

MTN Group is pleased to announce the appointment of Hermann Tischendorf as our Chief Technology & Information Officer for Digital and Fintech.  

“We are delighted to have a seasoned executive of Hermann’s calibre joining our growing DigiFin team,” says MTN Group Chief Digital and Fintech Officer Serigne Dioum. “He brings the skills and experience that will accelerate innovative digital and fintech advancements in line with our strategic intent of leading digital solutions for Africa progress.”

Hermann joins from 4Finance Group, where he was Chief Technology Officer. He has 30 years of experience in the financial services sector, where he has occupied numerous senior roles. Hermann brings a solid track record of success in directing organisational expansion, digital product development, operations management, IT budget allocation, as well as mergers and acquisitions.

At MTN, Hermann will bring transformation and disruption to our mobile payment platform and help improve customer engagement, experience, acquisition and loyalty. He will also be responsible for developing new products and services, building the nascent ecosystem and scaling up existing revenue streams.

Hermann holds a Master of Business Administration and a Diploma with Honours from Karl-Franzens University of Graz, Austria and studied Finance & Banking at the Anderson School of Management, University of California Los Angeles (UCLA). His appointment took effect on 1 December 2021.

MTN Group is pleased to announce the appointment of Adekunle Awobodu as our new Chief Financial Officer for Digital and Fintech.

Kunle is a seasoned business and finance professional who has spent most of his career at MTN, including serving as CFO for MTN Nigeria and for the MTN Irancell joint venture.

“We are thrilled that Kunle has joined the dynamic DigiFin team and look forward to what we know will be a valuable contribution,” says MTN Group Chief Digital and Fintech Officer Serigne Dioum.

In his 22 years in management roles, Kunle has built processes, teams and dealt with regulatory and compliance issues. Most recently, from 2019 to 2021, he was an Executive Consultant at MTN Nigeria, where he led Oracle implementation and provided support to the CEO and CFO on various financial, tax and accounting matters.

Kunle is a certified General Accountant and has a Bachelor’s degree in Finance and Banking from the University of Lagos, as well as a Master’s in Finance from the University of Leicester. He also holds several professional certifications.

As CFO for Digital and Fintech, effective 15 September 2021, Kunle’s responsibilities include ensuring the growth of these platforms in line with the Group’s strategic intent – Ambition 2025: Leading digital solutions for Africa’s progress.

Businesses integrating Flutterwave in Cameroon, Côte d’Ivoire, Rwanda, Uganda, and Zambia can receive payments via MTN Mobile Money

MTN is pleased to announce a mobile money partnership with Africa’s leading payments technology company, Flutterwave. This partnership will allow businesses integrating Flutterwave in Cameroon, Côte d’Ivoire, Rwanda, Uganda and Zambia to receive payments via MTN Mobile Money (MoMo). 

MTN MoMo is a fintech platform providing consumers and businesses with an electronic wallet, enabling electronic transfers and payments as well as access to digital and financial services. At the end of June 2021, MTN MoMo had 48.9 million active users and 581,514 merchants. MoMo enables businesses to accept and make payments within the mobile money ecosystem. This new partnership will enable Flutterwave to offer MTN Mobile Money as a payment method to its business customers.

In recent years, Africa has witnessed an explosion in mobile penetration as smartphone adoption has risen rapidly. According to the GSMA, this year Africa will hit the half a billion mark of unique mobile subscribers and the continent will reach 50% subscriber penetration by 2025. Sub-Saharan Africa alone is responsible for more than 45% of the world’s mobile money accounts with the number of account holders exceeding half a billion by 2020, as shared on Statista.

Through this partnership, MTN and Flutterwave will positively contribute to this trend by increasing mobile money usage and penetration in Africa to improve local economies and livelihoods as well as create opportunities for individuals and businesses across the continent.

Commenting on the partnership, Serigne Dioum, MTN Group Chief Digital and Fintech Officer said: “As we progress on our journey to becoming the largest fintech platform in Africa, we will empower millions of businesses to embrace e-commerce in our markets to accept digital payments from MoMo consumers. We believe this is an enabler to accelerating digitized payments in Africa. Building strong ecosystems through partnerships is central to our platform strategy and we will continue to invest in expanding the reach of our platform to consumers and businesses in Africa.”   

Commenting on the collaboration, Olugbenga “GB” Agboola, Founder and CEO of Flutterwave, said: “Africa has one of the highest growth rates for mobile money adoption and e-commerce in the world. It makes sense that we help provide a seamless payment method to support and ensure African businesses reap the full benefits of the e-commerce boom in the region. Our goal has always been to grow a new wave of prosperity in Africa by creating more avenues for businesses in Africa to accept payments. With this partnership, we can achieve this while creating endless possibilities for our customers.” 

The new partnership will further expand on Flutterwave’s previous collaboration with MTN, beyond Uganda and Rwanda – with the potential of deepening adoption of digital payments and e-commerce in Africa, a sector expected to reach $29 billion by 2022, according to Statista. 

Sanlam and MTN Group announced today that they are joining forces in an exclusive strategic alliance (the Alliance) to distribute Sanlam Group insurance and investment products across Africa, further developing MTN’s mobile financial services business.

The Alliance will build a digital insurance and investment business, which will be an integral part of MTN’s fintech offering. It will provide people across the continent with easier access to these services, particularly those sectors of the population that have typically been unable to access traditional distribution channels for such products.

The Alliance has the potential to pre-empt and adapt to digital disruption in markets where both Sanlam and MTN operate. It will also enable MTN to accelerate and scale its InsurTech offering through its brand and reach and by leveraging Sanlam’s licensing and geographical footprint, as well as its broad product capabilities and expertise. MTN InsurTech businesses currently have approximately 6 million active policyholders, with target of over 30 million policyholders by 2025 with this new Alliance.

The collaboration provides Sanlam with the opportunity to extend consumer access to its products and grow its Africa operations by providing insurance to MTN’s customer base across the continent, thereby deepening its extensive footprint in Africa.

Commenting on the formation of the Alliance, Sanlam Group CEO Mr Paul Hanratty said: “We are excited by MTN’s development of modern mobile financial services for the benefit and empowerment of the African consumer. It gives us great pride to be able to partner with MTN to build the best possible range of solutions in the insurance and investment arena for consumers. We anticipate strong long-term growth in mobile financial services and insurance and investments are no exception to this.”

The collaboration offers MTN the opportunity to provide more value-added services to its customers, enhancing its existing offering. “MTN Group is equally excited to be partnering with Sanlam in driving financial inclusion across the continent and providing customers with insurance and investment products tailored to the needs of the African consumer,” said MTN Group President and CEO Mr. Ralph Mupita.

“Sanlam is the ideal partner as the leading insurance and investment business across Africa, and with partnership key to its strategic and execution approach. MTN has built a scale fintech business with over 100 million wallets, of which approximately half are actively using Mobile Money services every month, presenting a meaningful opportunity to further drive financial inclusion through the provision of appropriate insurance and investment solutions.”

The Alliance will build and leverage the strengths and assets of both Sanlam and MTN to establish a digital insurance and investment capability across Africa.

In the initial period, the Alliance will be chaired by Ralph Mupita, with Paul Hanratty as Deputy Chair. While approximately 46% of Africa’s population has access to and uses cell phone services, insurance penetration remains low at less than 5% in most markets except South Africa.

The transaction is subject to the parties concluding definitive agreements and completing the relevant suspensive conditions.

MTN is the largest telecommunications operator in Africa with a presence in 17 countries on the continent and a total of more than 270 million subscribers across its total 21 markets. It is also a large fintech operator, with a presence in 19 countries and 100 million wallets, 800 000 agents and 650 000 merchants signed up.

Sanlam is the largest non-banking financial services group in Africa, with a presence in 33 countries across the continent. Forming mutually beneficial partnerships is part of Sanlam’s business model and is a key pillar for accelerating growth on the African continent.

MTN Group today announced a strong and resilient operational and financial performance in the first quarter of 2021, with growth in service revenue exceeding medium-term guidance, driven by gains in data and fintech revenue.

“The MTN Group has delivered a solid Q1 2021 trading performance, with service revenue and EBITDA margins expanding on the back of continued commercial momentum and resilient networks,” said MTN Group President and Chief Executive Officer Ralph Mupita, adding that the Group’s Ambition 2025 strategy had gained execution traction during challenging COVID-19 macroeconomic conditions in the quarter.

In constant currency terms, service revenue grew by 17.8% to R42.3 billion at end-March 2021, earnings before interest, tax, depreciation and amortisation (EBITDA) rose by 21.3% and the EBITDA margin widened to 44.2% from 42.7%.

“The overall Group results were supported by double-digit service revenue growth from our large operations and continued focus on our expense efficiency programme. We are encouraged in particular by the strong performance of MTN South Africa, as well as accelerating data and fintech services across the group in the period,” he said.

MTN South Africa (MTN SA) recorded strong performances across the consumer, enterprise and wholesale businesses. Underpinned by market share gains and a subscriber base of 32.1 million, an 11.8% increase in service revenue and good cost containment drove a 3.2 percentage point expansion in MTN SA’s EBITDA margin to 39.8%. MTN Nigeria and MTN Ghana – both of which reported Q1 results in the past week – continued to build on their solid operational execution and commercial momentum.

Group data revenue grew by almost a third amid sustained demand for work-from-home services, digital entertainment as well as online education offerings. Fintech revenue also accelerated, expanding by more than 31% as the value of fintech transactions increased by 87% to US$53 billion.

“We are pleased with the momentum in driving our platform strategy and the fintech separation project is progressing well, in line with our Ambition 2025 strategy,” said Mupita. “MTN Rwanda recently received a licence to operate a separate fintech entity, bringing the number of structurally separated entities to 12 (out of 16 fintech markets). We continue to progress our work in establishing the Topco structure for fintech, and anticipate that this will be concluded before Q1 2022.”

The Group’s strong overall performance was despite a 1.7 million decrease in subscriber numbers to 277.9 million as MTN Nigeria’s subscribers declined because of restrictions on all new SIM sales and activations in that market. The Group’s active data subscribers increased by 1.3 million to 115.6 million and the number of MoMo customers increased by 0.2 million to 46.6 million. Excluding the impacts of MTN Nigeria, MTN Group total subscribers increased by 3.4 million.

COVID-19 continued to impact lives and livelihoods across the world, including at MTN. By 31 March 2021, the Group had reported 1 557 COVID-19 infections and mourned the loss of 11 MTN employees to the virus across our markets. We continue to prioritise the health and safety of our people.

Alongside equity partners, in April we submitted a bid for one of two telecoms licences to operate in Ethiopia, Africa’s second most-populous country which represents the last and largest telco liberalisation opportunity in the world. MTN’s participation in the bid process aligns with our pan-Africa focus and capital allocation framework.

The Group remains committed to its asset realisation programme (ARP) and is confident of making progress on realising the 29% stake in tower company IHS Group in the short term. This is key to MTN’s ARP. IHS continues to explore an IPO of its shares in line with its public statement made in August 2020.

“Looking ahead, we are focused on executing our Ambition 2025 strategy, driving growth, de-leveraging the Holdco balance sheet and unlocking value, whilst navigating the impacts of the pandemic,” concluded Mupita.