MTN Uganda to Spin Off MoMo into Independent Fintech Firm
KAMPALA, JUNE 11, 2025 – In a strategic move set to reshape Uganda’s fintech landscape, MTN Uganda has unveiled plans to spin off MTN Mobile Money (MoMo) into a separate, standalone company. The move is part of a broader MTN Group initiative across Africa to unlock greater value by separating telecom and financial services—an approach already implemented in markets like Ghana and Nigeria.
MTN MoMo to Break Away from MTN Uganda
MTN Uganda announced a proposed structural separation and reorganisation, where MTN MoMo (U) will no longer be a subsidiary of MTN Uganda. Instead, the mobile money business will merge into a newly formed entity known as MTN New FinCo. This new company will be majority-owned by MTN Group Fintech Holdings B.V. (approximately 76%), while a trust representing MTN Uganda’s minority shareholders will hold the remaining 24%.
Strategic Reasons Behind the Split
Several key drivers are behind this bold decision:
- Regulatory Compliance: Uganda’s National Payment Systems Act 2020 requires that mobile money services be operated separately from telecoms to ensure transparency and oversight.
- Unlocking Shareholder Value: By separating MoMo, MTN aims to create a pure fintech vehicle that can attract specialized investment and partnerships in the digital finance space.
- Financial Performance: MTN MoMo is proving to be more than just a mobile payment platform. In the first quarter of 2025, it generated UGX 255.6 billion (USD 70.8 million), growing 18.4% year-on-year—outpacing traditional telecom revenues.
- Group-wide Strategy: The move aligns with MTN Group’s “Ambition 2025” strategy to transform its fintech and digital businesses into high-growth platforms across Africa.
Shareholders to Vote in July
An Extraordinary General Meeting (EGM) will be held on July 2, 2025, where MTN Uganda shareholders will vote on whether to approve the transaction. A supermajority of at least 75% of the votes cast is required for the spin-off to proceed.
The meeting will be held in a hybrid format—both physically and online—giving all shareholders the chance to participate.
What It Means for Shareholders
If the vote passes, here’s what shareholders need to know:
- New Ownership Structure: Post-separation, MTN Group will retain around 76% ownership in MTN New FinCo. Minority shareholders will hold 23.985% indirectly through a trust.
- Dividend Changes: Dividends from New FinCo will be taxed at 15%, up from the current 10% paid by MTN Uganda. MTN has indicated plans to implement mitigation measures to reduce any potential negative impact.
- Potential Public Listing: MTN has suggested that it may list MTN New FinCo on the Uganda Securities Exchange in the next 3 to 5 years, offering direct access to MoMo’s performance.
Impact on Uganda’s Fintech Sector
This move is expected to:
- Accelerate Innovation: An independent MoMo will likely invest more aggressively in digital payments, credit services, micro-insurance, and international remittances.
- Boost Fintech Investment: By becoming a standalone entity, MoMo is now more attractive to local and international investors eyeing Africa’s fintech boom.
- Challenge the Competition: With MoMo breaking free, the competitive pressure on Airtel Money, Safaricom, and Uganda’s emerging fintech players is expected to intensify.
Part of a Continental Shift
MTN’s move is not isolated. Across Africa, telecoms are rethinking their fintech strategies. Airtel has already spun off Airtel Money in Kenya. In contrast, Safaricom continues to operate M-Pesa under its telecom arm despite growing regulatory pressure to separate.
MTN Uganda’s decision could set a precedent and potentially influence policy and strategy across the region.
Final Thoughts
The upcoming separation of MTN MoMo from MTN Uganda marks a defining moment not just for the company but for Uganda’s digital finance sector. As the July 2 vote approaches, all eyes will be on how the market responds. If approved, this move could signal a new era of fintech-led growth in Uganda—where mobile money is no longer just a telco add-on, but a powerful standalone force in its own right.
