MTN Nigeria, one of the country’s largest telecommunications company, is proposing to merge its two finance subsidiaries, Momo Payment Service Bank Limited and Yello Digital Financial Services Limited, in a move aimed at enhancing the value of the company and its shareholders.
The company made this announcement in a document labelled “Explanatory Notes To The Resolutions To Be Proposed At The 2023 Annual General Meeting (AGM)”, explaining that the proposed merger would allow the new entity to “hold the Payment Service Bank license granted by the Central Bank of Nigeria and will also be capable of performing super-agent services and other permissible activities.”
The annual grand meeting is scheduled for Tuesday, April 18, 2023, and MTN Nigeria has called on major stakeholders to support the motion for the merger by voting in favour of the proposal. The company’s director stated in the document that the merger will enhance the value for the company and its shareholders.
Momo Payment Service Bank Limited launched in 2022 and quickly gained traction in Nigeria’s financial ecosystem, recording 4.2 million wallets less than two months after its launch. Out of these 4.2 million wallets, the multinational telecommunications company revealed that 2.4 million were active users, which had raised the Momo transaction volume to approximately 7 million. The company reported that deposits stored for mobile users had skyrocketed to $1.081 billion by June 2022.
MTN Nigeria’s CEO, Karl Toriola, said that Momo PSB demonstrates the company’s support for the Nigerian government’s “drive towards financial inclusion in Nigeria” and not just for those in urban centres but also for people in rural and remote areas of the country who remain excluded from the financial system.
Yello Digital Financial Service (YDFS) is another subsidiary of MTN Nigeria that secured a license to begin operations from the Central Bank of Nigeria in 2019. In June 2018, YDFS was created as a financial technology company to meet the criteria for a CBN license, and it is MTN’s core foothold in Nigeria’s financial ecosystem.
MTN Nigeria’s CEO, Ferdi Moolman, said that the company is in a position to broaden the availability of financial services for the underserved across the country through the network established by YDFS.
Super agents are businesses licensed by the CBN to recruit agents to provide financial services to communities on behalf of banks to increase financial inclusion. The proposed merger of Momo PSB and YDFS will allow the new entity to perform super-agent services. “The proposed merger will enhance value for the company and its shareholders,” MTN stated in the document.