RWANDA – MTN Rwanda is considering setting up an independent subsidiary to run financial technology operations in the country.

MTN Rwanda Cgief Executive 0fficer Mitwa Ng’ambi said that with financial technology fast becoming influential in digital finance, they have been considering setting up an independent subsidiary running financial technology operations.

This would see Mobile Money move from a department within the telecom to a stand-alone company.

“Mobile Money was initially set up as a department within MTN Rwanda. Where we stand today, we see the future of digital finance, Fin-tech so much bigger than what we are today,” she said.

She said that they had already commenced engagement with the regulator, Central Bank of Rwanda, to establish the requirements and characteristics of the new firm.

She, however, said that the timelines for the establishment and constitution of the new firm are yet to be determined.

The new firm, she said, is expected to be agile to trends in fin-tech hence the autonomous structure.

This comes at a time when Fin-tech is expected to be a key driver in driving financial inclusion, fostering savings, access to short-term credit, among others.

With increased mobile penetration and usage, the avenue could bridge a gap in access to financial services which financial sector operators such as banks have been unable to bridge.

In 2020, MTN Rwanda saw a significant uptake of their Mobile Money and data services with initial estimates pointing to a 20 per cent (year on year) growth in revenue.

“Where we stand today, we see the future of digital finance, Fin-tech so much bigger than what we are today”

Though audited financials are not out yet, Mark Nkurunziza, the operator’s Chief Financial Officer, said that they have noted a shift in revenue composition with data and Mobile Money increasingly raking in significant portions of revenue.

Chantal Kagame, the firm’s Chief Business and Corporate Affairs Officer, noted that during the course of 2020, the active mobile money user base had grown from 2.8 million to 3.2 million while MoMo Pay users had increased from about 200,000 to about 1.4 million.

This, she noted was indicative of progress in uptake of cashless payments within the economy.

“We currently have more than 2.4 million customers using MoKash both by saving and taking loans. These are mainly by low-income earners where the service has helped them to save, take loans and develop their lives in general,” she added.

However, with the increased uptake and usage mobile money, there has been an increase of fraud which the firm said is constantly working to curb including

MTN is also expected to list on the Rwanda Stock Exchange by way of introduction allowing Rwandans to invest and partake in its returns.

While 100 per cent shares of MTN Rwanda will be listed on the stock exchange, the 20 per cent stake held by Crystal Telecom will be available for trading by the public.

MTN Group will hold the 80 per cent shares.

The Board of Crystal Telecom has recommended that the shareholders of CTL become direct shareholders in MTN Rwanda when the listing happens through a transaction where CTL shall repurchase all its shares from its shareholders in exchange for MTN Rwanda shares as consideration (share swap).

The board has proposed that when MTN Rwanda lists, the share swap will be on a 1:1 ratio basis, with each shareholder receiving 1 MTN Rwanda share for every share repurchased by the CTL.

The share swap and the approval, therefore, shall be conditional upon the successful listing of MTN Rwanda on the RSE, an announcement by the Board mentioned.

CTL is also expected to wrap up operations and close the shop thereafter.

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