• MTN has signed a definitive agreement with Mastercard for a minority investment of $200 million into MTN Group Fintech.
• In addition, MTN has announced that MoMo users with a feature phone can now apply for a short-term loan.
• This move should help entrepreneurs and those in the informal sector with getting access to funds they require in a pinch.

Many years ago there was an idea where mobile network operators expanded from simply offering telecommunication and connectivity solutions to, well, just about anything from content delivery to banking.

Over the last four years, multiple MNOs have realised this idea and expanded their services to include cloud platforms, streaming platforms, and even financial tools. One of the more notable players is Vodacom with its Vodacom Business and financial services through VodaLend.

Now MTN has signalled that it intends to further invest in its financial service offering with two announcements this week.

The first of those announcements is that MTN has signed a definitive agreement with Mastercard for a minority investment of $200 million into MTN Group Fintech.

“These agreements complement the larger commercial relationship between the Group and Mastercard to support the continued development and growth of technology and infrastructure to drive financial inclusion across the African continent. This commercial relationship is a key enabler for the acceleration of our fintech business’ payments and remittance services,” MTN wrote in a SENS announcement.

MTN’s fintech arm includes MTN Mobile Money or MoMo. This platform gives business owners and consumers access to an array of digital financial services including payments, insurance and lending.

On that last point, MTN’s second announcement about its commitment to fintech investment deals directly with MoMo.

With JUMO and Qwikloan, MTN is bringing short-term loans to more MoMo customers.

Initially launched in 2023, now MoMo users with a feature phone will be able to apply for a short-term loan ranging from R250 to R10 000, depending on their eligibility. Loans carry an interest rate as low as 10 percent. This is made possible through the combination of MTN MoMo’s payment infrastructure, as well as JUMO’s banking infrastructure which leverages predictive AI.

“MoMo’s Qwikloan offering is a testament to our dedication to providing financial solutions that prioritise accessibility and affordability. In these challenging economic times, our goal is to empower South African consumers by offering a reliable alternative with significantly lower interest rates compared to banks,” chief financial officer at MTN, Bradwin Roper said in a statement.

MoMo users with a feature phone can now dial *151# to see if they qualify for a short-term loan. Prospective lenders will need a South Africa ID number and will have to consent to a credit affordability check. Once approved, the loan will be deposited into a user’s MoMo wallet. The repayment will also be collected from the same wallet.

“Our work with MTN will support entrepreneurs who need simple, quick access to working capital to grow their businesses. This work demonstrates how partnerships between financial technology companies such as JUMO, and mobile money providers are essential to driving financial inclusion and creating more opportunities for customers to borrow and save conveniently,” JUMO president, Joe Mucheru said in a media release.

“There is even greater potential to grow eligibility and accessibility by introducing bank partners to the initiative. Working with partners to build the infrastructure they need to achieve their goals is what we do,” Mucheru added.

While the offer is designed for entrepreneurs and informal business owners, Qwikloan is available to both prepaid and postpaid MoMo customers.

We highly recommend that those interested in taking up such a loan take the time to compare interest rates and make sure they aren’t borrowing more than they can afford.