African telecommunications company MTN Group Ltd. is seeking to include up to three more strategic investors in its telecom unit, said MTN Group CEO Ralph Mupita.
“We are open to selling up to a maximum of 30% of the FinTech business. There might be three or maybe even four strategic partners within that,” stated Mupita told Bloomberg Tuesday (Aug. 15).
The announcement came on the heels of an investment from Mastercard that propelled the FinTech unit’s valuation to $5.2 billion. MTN has 60 million end-users using its FinTech services, including “cash-in,” “cash-out” and other basic banking services.
Africa’s young, under-banked population has increasingly adopted mobile payments as a linking bridge to financial services. Mupita acknowledged this progressive phenomenon in the world’s second-largest continent.
“With mobile money and FinTech services, you are able to leapfrog people from not having any financial services to using the phone to provide a lot of financial services,” Mupita said per the report.
Despite the growing use of electronic and digital channels in Africa’s financial sector, nearly half of the continent’s population still does not have a traditional bank account and uses cash, putting up roadblocks to access to digital financial services.
Another issue is a fragmented market — Africa has 54 countries, more than 1.4 billion people and over 2,000 languages. Add to that multiple currencies and banking systems.
Praveksha Maharaj, director of partnerships MEA at Entersekt, offered her views on the growth of digital payments in Africa and its impact on the global consumer experience.
The majority of Africans have “embraced technology at scale and managed to leapfrog into the future of digital payments,” said Maharaj.
Despite the gradual progress made in the continent, transactions are estimated to be half made using cash as an alternative. Given the widespread variety of currencies and isolated banking systems, this factor makes access to digital financial services particularly challenging.
“I’m very hopeful and think it will continue to go in the right direction as we build solutions that meet customers at their point of need,” said Maharaj.
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