Africa’s largest telecoms operator, MTN Group, is exploring banking licences in select markets as it considers expanding its lending business using its own balance sheet.
The company’s Chief Executive Officer, Ralph Mupita, disclosed this on Tuesday while speaking with journalists, as MTN intensifies its push into fintech and seeks to grow revenue beyond its traditional telecommunications business.
Lending has emerged as one of the fastest-growing areas of MTN’s mobile money operations, alongside services such as payments and e-commerce, making financial services an increasingly important part of the group’s growth strategy.
What they are saying
MTN currently provides loans to customers through partnerships with banks. However, Mupita said the group is assessing the possibility of obtaining banking licences in markets where it has large customer bases and significant funds held in mobile money wallets.
- “We’re beginning to explore, where it makes sense and where there are large customer bases (and) significant floats in wallets, whether it may make sense to have some sort of banking licence that enables us to take deposits,” Mupita said.
Under the proposed model, MTN would gradually use its own balance sheet to provide loans, although the company does not intend to abandon its existing partnerships with banks for lending.
Mupita said the move would be selective rather than applied across all of MTN’s markets, with any transition to balance-sheet lending expected to happen gradually because of the risks involved.
He identified lending as the major growth opportunity within the group’s expanding fintech business.
- “The big growth now, which will be the growth of the future, is actually lending.”
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MTN’s consideration of banking licences comes as the group continues to…
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