MTN Group has signed definitive agreements with Mastercard for the payments firm to stake a minority investment of up to $200 million into MTN Group Fintech B.V., at a valuation of $5.2 billion on a cash and debt-free basis.
The agreement, signed on 5th February, and revealed by MTN on Tuesday, 6th February, follows an announcement MTN Group’s President and CEO, Ralph Mupita, made in August 2023 regarding the telco’s intention to sell a 30% stake in its fintech division.
This investment, though not categorised under the Johannesburg Stock Exchange (JSE) Listings Requirements, is subject to customary closing conditions. It forms part of a broader commercial relationship between MTN Group and Mastercard, with MTN aiming to leverage its extensive reach across the Africa to enhance access to affordable and reliable financial services.
MTN’s fintech division, consisting of MTN MoMo, insurance services, airtime lending, e-commerce has been increasing its foothold in the market. The telco disclosed in its provisional financial results for the six months ending in June 2023, that its overall fintech revenue climbed by 21.7% year on year due to MoMo, and other remittance services.
The telecommunications giant, on its LinkedIn page, described the partnership as a reflection of MTN and Mastercard’s shared commitment to “enhancing financial ecosystems across Africa.”
MTN stated further that together with Mastercard, it sought to create an Africa “where every African has access to affordable, reliable financial services, furthering financial inclusion and empowerment on the continent.”
MTN also expressed its intention to continue exploring opportunities for value-enhancing partnerships and investments with strategic partners and long-term investors, contingent upon market conditions.
With this latest investment from Mastercard, MTN is poised to strengthen its position in the rapidly evolving fintech landscape, driving innovation and expanding access to financial services across the continent.
By Derrick Kafui Deti – Digital Economy Magazine
