Fintech subdivision of MTN Uganda to be independently established; potential separate stock market debut within 3-5 years on horizon
In a strategic move to unlock long-term investor value and deepen corporate governance, MTN Uganda has received shareholder approval to carve out its mobile money and fintech division into a standalone business. This new entity, to be regulated by the Bank of Uganda under the National Payments Systems Act, aims to list separately on the Uganda Securities Exchange (USE) within a three- to five-year period [1][2].
This spin-off is part of MTN Group’s broader “Ambition 2025” strategy to accelerate fintech growth across Africa. Similar spin-offs have been seen in Nigeria and Ghana, signalling a commitment to leveraging digital financial services in Africa [1][2][3].
The new fintech entity will operate as a separate company, aligning with MTN Group's broader strategy to unlock value from its digital financial services across Africa. The separation of the fintech division could pave the way for more specialized and innovative fintech services in Uganda [1][2].
The new company will be majority-owned by MTN Group Fintech Holdings B.V, the fintech investment arm of parent company MTN Group (based in South Africa) [1]. The separation of the fintech unit from MTN Uganda's core telecom business was approved at an extraordinary general meeting on Tuesday [1].
The new fintech entity will continue the focus on mobile money services, which have surged in popularity across Africa for various transactions like utility bills and transport fares. The move reflects the growing scale and importance of fintech services in Africa, particularly mobile money, which has become a backbone of financial inclusion across the continent [1][2].
By spinning off the mobile money unit into an independent fintech company, MTN aims to separate its high-growth financial services from its telecom operations, allowing the fintech arm to innovate and expand more freely while offering local investors direct access to Uganda’s $7.1 billion digital financial ecosystem [1][2].
This move could potentially lead to increased growth and development in the Ugandan fintech sector. The new entity's listing on the USE could potentially attract more foreign investment into the Ugandan fintech sector, further boosting its growth and development [1][2].
MTN Uganda, the largest telecom operator in Uganda, has approximately 21 million mobile subscribers [1]. The primary competitor of MTN Uganda is the local unit of Bharti Airtel, owned by India's Bharti Enterprises. The new fintech entity's operations could have broader implications for the African fintech market, given the growing importance and scale of mobile money services across the continent [1][2].
The new fintech entity's operations are part of MTN Group's strategy to leverage its digital financial services in Africa. The restructuring will also enable the fintech business to raise capital more efficiently, potentially through an initial public offering (IPO), thereby supporting technology-driven financial inclusion and service expansion such as transfers, savings, loans, and utility payments [1][2][3].
[1] "MTN Uganda to list fintech arm on Uganda Securities Exchange", BBC News, 2022. [2] "MTN Uganda spins off fintech arm to boost growth", Reuters, 2022. [3] "MTN Group's Ambition 2025: Accelerating fintech growth in Africa", MTN Group, 2021.
The new fintech entity, operated as a separate company, will focus on mobile money services and aims to list separately on the Uganda Securities Exchange (USE) within a three- to five-year period, aligning with MTN Group's broader strategy to unlock value from its digital financial services across Africa. Investors can expect more specialized and innovative fintech services in Uganda as a result of this spin-off, potentially attracting foreign investment and leading to increased growth and development in the Ugandan fintech sector.
