MTN Eyes Lending Market Amidst Fintech License Applications

Africa’s leading telecommunications provider, MTN Group, is strategically expanding into the lending space across key markets including Nigeria. This move aligns with MTN’s broader ambition to capture a larger share of Africa’s underserved credit market as it seeks regulatory approvals for its fintech arm.

Addressing Credit Gaps in African Markets

According to Serigne Dioum, CEO of MTN Group Fintech: “We’ve expanded access to credit for more people, but we also want to move further up the lending value chain.” This ambition reflects a continent where formal credit access remains limited despite high demand.

• In Nigeria alone, nearly 80% of MSMEs lack access to formal credit (NCGC report)
• The Nigerian market faces an estimated $236 billion funding gap (Stears report)
• Across Africa, only 4-5% of adults currently have access to formal credit

Nigeria as a Strategic Hub

MTN Group CEO Ralph Mupita confirmed that Nigeria is a key focus for this expansion: “We are pursuing additional licences that will allow us to offer a broader suite of financial products and services.” While specific license details remain undisclosed, the company aims to deepen its financial offerings in multiple markets.

Building on Fintech Momentum

MTN’s fintech business has become one of the group’s fastest-growing divisions:

• 2023 Revenue: $2.8 billion
• Transaction Value Processed: Over $500 billion
• Transactions Handled: More than 23 billion
• Active MoMo Users: Over 70 million
• Merchant Network: Over 2 million
• Agent Network: Over 1.4 million

Currently, MTN facilitates credit access through partnerships – over one million people accessing loans daily via MTN platforms for small business financing, inventory purchases, and urgent expenses.

Future Growth Opportunities

MTN estimates Africa’s fintech revenue pool could expand by as much as 13x in the next five years. While digital payments are growing rapidly, cash transactions still account for over 90% of activity on the continent. This presents significant opportunities not only in lending but also in payments and remittances.

In Nigeria, MTN has already applied for Payment Solution Service Provider (PSSP) and Payment Terminal Service Provider (PTSP) licenses through its MoMo PSB subsidiary – moves that would allow greater control over the payments value chain and reduce reliance on third-party processors. The company is also awaiting regulatory approval for the structural separation of its fintech business in Nigeria, a process expected to be completed tax efficiently.

With this strategic expansion into lending, MTN aims to capitalize on Africa’s evolving financial landscape and capture a larger share of the continent’s digital economy.