What you need to know:
The structural separation is the second phase of the larger plan in which MTN is seeking to create an independent Fintech company driven by mobile money
MTN Uganda shareholders have agreed to remove the mobile money business from the main telecom company that is listed on the Uganda Securities Exchange (USE).
The decision, which was made during an extraordinary general meeting after a vote Tuesday, is part of the larger plan in which MTN Group is seeking to create a separate company just for Fintech (financial technology) services.
The new plan seeks to move mobile money into a bigger Fintech company called FinCo, which will bring together MTN’s mobile money businesses across Africa.
MTN believes this new setup will help the Fintech side grow faster, work better, and attract the right investors — especially those who understand how financial services are regulated.
MTN chairman Charles Mbiire said Tuesday that Fintech is growing fast and needs its own space to succeed.
“Fintech is different. It needs freedom and flexibility to grow. By separating it, we are giving it room to innovate and lead,” he said.
Leading up to the decision, MTN spent a week holding town hall meetings with shareholders across the country explaining the plan and answering questions, something that helped gain their support for the move.
After the extraordinary general meeting, MTN announced yesterday that it had officially received approval to go ahead with its plan to structurally separate its mobile money business’ ownership from the listed holding. The telecom said it had now obtained approval to necessary agreements and take any steps needed to make the move happen pending regulatory approvals and tax audits.The MTN mobile money was launched in 2009 – at a time when mobile money was a bold and risky idea. But MTN believed in its future. 15 years later, mobile money has become a big part of daily life in Uganda. In 2021, MTN took its first step by legally separating mobile money unit under the National Payment Systems Act.
Now, after months of preparation and discussions, the company is taking the next step – turning the mobile money business into an independent Fintech company.
This new company will be mostly owned by MTN Group Fintech Holdings B.V, with the rest of the shares held in trust for Ugandan investors.
Ms Sylvia Mulinge, the MTN chief executive officer, said this is the second step in a three-step journey, with the final step being a move to list the new Fintech company on the USE within three to five years.
“Now that shareholders have agreed, we will start the next phase – working with regulators, merging the businesses, and officially setting up the new Fintech company and investor trust,” she said.separation has been in the works since 2020.
