MTN, Africa’s largest telecoms group, has built one of the continent’s biggest mobile-money businesses. But with far more telecom customers than MoMo users, it has a huge opportunity to turn its network into a fintech growth engine.
That opportunity is most pronounced in Nigeria, where the telecom giant has five million fintech customers but sees a path to as many as 30 million over the medium term. The company is now bringing in technology from Alibaba, a technology and commerce giant, Alipay, a Chinese digital payments platform, and Ant International Group. It is also preparing to move deeper into lending, including using its own balance sheet.
Speaking to TechCabal a day after MTN released its six-month financial results, group CEO Ralph Mupita said Nigeria remains a key market for expanding the company’s fintech business. “It would be converting more of the Nigerian customers who are using our telecommunications services into fintech customers,” he said.
Mupita stated that getting that ratio to 30%, or potentially 50%, would translate into around 30 million customers. “Can we grow from 5 million to 30 million customers over the medium term? If we did that, I guess we would be able to say to you in the medium term that we’ve been successful,” he noted.
The ambition comes as MTN’s fintech business is already operating at significant scale across Africa. In the six months ended June, MoMo monthly active users rose 12.1% to 70.8 million, while fintech transaction volumes increased 17.2% to 13 billion. Transaction value rose 33.8% in constant currency to $330.5 billion.
But the gap between MTN’s telecom and fintech customer bases highlights the challenge the business faces. Having hundreds of millions of mobile customers does not automatically mean those customers will use payments, lending, insurance or other financial products.
According to Mupita, MTN is looking beyond simply adding more MoMo users. In Nigeria, it is using technology from Alibaba, Alipay and Ant International as it tries to build out its fintech proposition and compete in a market already crowded with digital financial-services companies such as OPay and PalmPay.
“There are many fintech businesses there (Nigeria), MoneyPoint, OPay, PalmPay and others, but there is room for quite a lot of players, and we see a lot of growth there,” Mupita told TechCabal.