MTN fintech unit seeks more investors to join Mastercard

MTN is seeking as many as three more strategic investors in addition to Mastercard for its fintech unit, which the African telecom company values at $5.2 billion (R99.6 billion).  

“We are open to selling up to a maximum of 30% of the fintech business,” MTN CEO Ralph Mupita said on Bloomberg TV Tuesday. “There might be three or maybe even four strategic partners within that.”

On Monday, MTN said it signed a memorandum of understanding with Mastercard for strategic investment and will also use the payment network processor’s technology to offer more services. 

Africa’s young, under-banked population is increasingly using mobile phones to bridge gaps in services. That’s opened a lucrative and fast-growing space in the fintech sector for wireless carriers.

Much of the investment to date has been in mobile-payment systems, with a wave of fast-growing startups such as Flutterwave Inc. and Interswitch Ltd. emerging.

MTN is Africa’s largest wireless operator. It has 60 million users for its fintech unit, which currently offers basic services like cash-in and cash-out, according to Mupita. 

“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. 

The company’s shares fell 0.7% to R134.90 at 2:55 p.m. in Johannesburg. Shares closed up 4.9% on Monday after the deal was announced, the most in three months.