Mastercard has agreed to take a minority stake in the financial technology unit of South Africa’s MTN, Africa’s biggest mobile company by subscribers, valuing the arm that covers payments and remittances at more than $5bn.
In brief:
-MTN has been seeking to unlock value in one of Africa’s largest mobile money networks while global investors are being enticed by fintech assets that are growing quickly on the continent outside traditional banking.
-The Johannesburg-based company’s aspirations were boosted after obtaining a mobile banking license in Nigeria, its largest market, which allowed MTN to offer financial services to millions of new clients.
-According to MTN Group president and CEO Ralph Mupita, the deal will be structured as a commercial partnership on payments and remittances employing Mastercard’s technical infrastructure to develop throughout Africa and an investment in a minority share.
What does this mean?
This news comes a year after MTN Group said it was searching for minority investors to invest in its African fintech subsidiary after separating it from the carrier’s main telecom business to maximize development in the thriving division.
