DURBAN - SOUTH African mobile telecommunications company MTN yesterday announced a R28m partnership with the International Finance Corporation (IFC), a member of the World Bank Group, to expand MTN’s Mobile Money (MoMo) business in South Africa.
The partnership was targeted at the unbanked and underbanked population through establishing a strong network of MoMo agents.
Felix Kamenga , MTN South Africa chief officer for Mobile Financial Services, said the partnership provided the opportunity to bridge the digital divide and broaden financial inclusion.
According to a recently published article by the Oxford Business Group, about 23.5 percent of the people in the country were unbanked, while R12 billion in cash was believed to be held outside of banks.
The partnership would also result in a strong employment drive. The IFC and MTN South Africa would seek to recruit 10 000 mobile money agents this year to increase access to affordable financial services in underserved communities.
MTN would identify, recruit, enrol, train and supervise the new MoMo agents and assist any dormant MoMo agents by giving them support where they struggle to get off the ground, it said.
A team of trade development representatives would be created and trained by MTN-SA and the IFC to manage a portfolio of MoMo agents, support them in growing their business and managing compliance regulations, such as anti-money laundering and Know Your Customer.
Kamenga said: “The growth and development of 10 000 MoMo agent businesses across the country not only benefits local communities and economies, but has the ripple effect of many more unbanked and underbanked South Africans having an opportunity to manage their money digitally, wherever they are.”
In the first quarter of this year, MTN announced that active MTN Mobile Money (MoMo) customers rose by 200 000 to 46.6 million. The value of MoMo transactions was up 86.6 percent year-on-year to $53.2bn.
The company said the number of active merchants accepting MoMo payments doubled year on year to 521 000, while the total value of MoMo merchant payments rose by 299.2 percent to $4.8bn.
Kamenga said the programme would engage with small and medium-sized retail businesses with a particular focus on developing the youth and women and under-serviced areas.
The IFC’s country manager for South Africa, Adamou Labara, said digital technologies were helping to connect businesses with customers and suppliers, and were increasing access to lending and payment systems for individuals and small businesses.
“Mobile money is a perfect example of this and is needed now, more than ever, to help small businesses to grow and to reach communities where access to financial services is low,” said Labara.
In March, MTN announced plans to spin off its fintech business before the end of the first quarter of next year.
In its strategy update, “Ambition 2025, Leading digital solutions for Africa’s progress” , MTN said it had completed a comprehensive review of its strategy in November last year, resulting in a repositioning of the business for sustained growth and greater relevance to 2025.