MTN Eyes Banking Licences as African Fintech Business Expands Into Lending

MTN Group is considering banking licences in selected African markets as the telecommunications giant moves deeper into lending and seeks new sources of growth beyond its traditional voice and data businesses.

Group President and Chief Executive Officer Ralph Mupita said MTN is evaluating whether banking licences could allow the company to take deposits and eventually finance loans from its own balance sheet.

The move would represent a significant expansion of MTN’s financial-services strategy, which has grown from mobile-money transfers and payments into a broader ecosystem encompassing e-commerce and credit.

Lending is emerging as one of the fastest-growing areas of the company’s mobile-money operations and is increasingly being viewed by management as an important source of future growth.

At present, MTN provides loans to customers through partnerships with established banks, limiting the amount of credit risk carried directly on the telecommunications group’s balance sheet.

However, the company is assessing whether that model should evolve in markets where it has sufficiently large customer bases and significant amounts of money held in mobile wallets.

Mupita said banking licences in such markets could enable MTN to accept deposits and, over time, use its own balance sheet to fund loans.

The company does not intend to abandon partnerships with conventional banks and any transition toward direct balance-sheet lending would be gradual because of the additional financial risks involved.

MTN also does not plan to pursue banking licences across every market in which it operates. Instead, management intends to selectively identify countries where the size and activity of its mobile-money ecosystem could support the model.

The strategy reflects a broader transformation underway across Africa’s telecommunications industry as operators increasingly seek revenue from financial services and digital platforms.

Large mobile-money networks provide operators with extensive transaction data and established relationships with millions of consumers, including customers who may have limited access to conventional bank credit.

Moving into direct lending could allow MTN to capture a larger portion of the economics generated by those relationships rather than relying solely on fees and revenue-sharing arrangements with banking partners.

It would, however, expose the group to risks more commonly associated with traditional banking, including credit losses, funding requirements, capital adequacy rules and stricter prudential supervision.

Mupita acknowledged that balance-sheet lending carries additional risks and said the expansion would therefore take place progressively.

The banking push forms part of MTN’s wider effort to diversify its business as demand for payments, digital commerce, lending and other financial services expands across its African markets.

The group reported strong growth in its digital and fintech operations alongside its latest half-year results, while service revenue increased 17.5% to 115.3 billion rand.

MTN’s adjusted headline earnings per share rose 21.3% during the period to 793 cents, supported by stronger operating performance and cash generation.

The group is simultaneously increasing investment in digital infrastructure, including plans for AI-enabled data centres in Nigeria and South Africa.

For MTN, expanding from facilitating loans through banking partners toward potentially taking deposits and lending directly would mark another step in its evolution from a telecommunications operator into a broader African digital and financial-services group.