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MTN Group Limited, Africa’s largest telecom service provider, led by Zimbabwean senior executive Ralph Mupita, has announced its intention to sell a minority stake in its fintech business, valued at $5.2 billion, to global payment systems company Mastercard.
The agreement, formalized through a memorandum of understanding, is expected to boost the growth of MTN Group’s fintech services.
Under the leadership of Mupita, MTN Group has solidified its position as Africa’s largest telecom service provider, with a customer base exceeding 292 million across 19 markets.
The group’s financial resilience is evident in its recent financial report for the first half of 2023, as its profit increased from R10.4 billion ($544.6 million) to R11.16 billion ($584.4 million), while its revenue surged from R97.5 billion ($5.11 billion) to R113.2 billion ($5.93 billion).
The definitive investment agreements are anticipated to materialize soon following both parties’ successful completion of customary due diligence procedures.
The closing of the deal will be subject to standard closing conditions. Once finalized, Mastercard will secure a minority stake in MoMo, the fintech arm of MTN Group.
The collaboration between MTN Group and Mastercard is poised to deliver comprehensive benefits to consumers and businesses alike.
MoMo users will gain access to global payment capabilities, enabling international transactions, while businesses operating within the MoMo ecosystem will be empowered to digitize their payment systems and accept payments from a broader spectrum of customers.
Commenting on the group’s performance, Mupita highlighted the impressive progress made amid challenging market conditions. “Our strategic initiatives have yielded robust results, evident in our improved network availability and operational performance,” he said.
Mupita emphasized the remarkable network availability rate in South Africa, which exceeded 90 percent despite severe electricity shortages nationwide. Additionally, the Group showcased its operational prowess in Nigeria, navigating cash shortages and increased inflation to deliver a strong performance.
MTN Group and Mastercard alliance underscores a shared commitment to fostering innovation and enhancing financial services accessibility across the African continent.
As regulatory approvals are awaited and the finalization of investment agreements draws closer, stakeholders, and customers eagerly anticipate the potential this collaboration holds for shaping the future of fintech in Africa.
