Mobile operator MTN Uganda accelerates plans for a mobile money spin-off, aiming for completion before the scheduled July vote.
MTN Uganda Announces Separation of Mobile Money Arm to Comply with Regulatory Requirements and Enhance Fintech Operations
MTN Uganda, one of the leading telecommunications companies in Uganda, has announced plans to separate its mobile money arm, MTN Mobile Money Uganda Limited (MTN MoMo), from its core telecom business. This move is in response to the National Payment Systems Act 2020 and aims to position MTN MoMo as a standalone fintech company.
The structural separation is intended to give the mobile money business greater freedom and flexibility to innovate, improve efficiency, foster growth, and attract investors specialized in financial services regulation. This strategic decision aligns with MTN Group's broader fintech strategy and is part of a larger strategy by the group to adapt to fintech regulations in various markets.
According to the Payment Systems Act, a payment service provider must establish a subsidiary legal entity for electronic money issuance. In Uganda, mobile money providers are required to operate as separate legal entities. The separation of MTN MoMo from MTN Uganda's core telecom business is a requirement under Ugandan regulations for electronic money issuers.
The spin-off is expected to be completed by mid-2025, following an Extraordinary General Meeting (EGM) held on July 2, 2025. During the EGM, shareholders voted on the proposal to separate MTN Mobile Money Uganda Limited from MTN Uganda. The approval marks the critical phase to proceed with the formal separation process, including entering and implementing transaction agreements to effect this change.
After the approval, MTN intends to transform the mobile money unit into an independent fintech company, which will be majority-owned by MTN Group Fintech Holdings B.V., with some shares held in trust for Ugandan investors. The final stage envisions listing this new fintech company on the Uganda Securities Exchange within three to five years.
It is important to note that the use of airtime as electronic money is not allowed under Uganda's Payment Systems Act. This prohibition is aimed at ensuring the safety and stability of the financial system in Uganda.
Sources: [1] Kenyan Wall Street [2] The Monitor [3] The Observer [4] Daily Monitor
- The strategic separation of MTN Mobile Money Uganda Limited (MTN MoMo) from MTN Uganda's core telecom business is a step towards positioning it as a standalone fintech company, allowing it to innovate, improve efficiency, foster growth, and attract investors specialized in financial services regulation, thereby aligning with MTN Group's broader fintech strategy.
- In compliance with the National Payment Systems Act 2020 and Ugandan regulations for electronic money issuers, MTN intends to transform the mobile money unit into an independent fintech company, with the spin-off expected to be completed by mid-2025, followed by a potential listing on the Uganda Securities Exchange within three to five years.
