MTN MoMo Uganda has concluded its maiden interest payment of Shs 5.7billion to 19.8 million customers who had a minimum of Shs1 and above for the second quarter of 2022. Richard Yego, the company’s managing director shares some insights about the implications of the interest payout and the industry going forward.
Congratulations on successfully paying out maiden interest to MTN MoMo customers. Does this payment mean that MTN MoMo and customers are now starting to reap from the new industry laws and regulations?
Yes. The National Payment Systems Act of 2020 and the National Payment System regulations of 2021 mandates MTN MoMo to pay quarterly interest to its customers. This has certainly brought more opportunities to the mobile money space and an immense contribution to the country’s financial inclusion agenda. Never before were customers earning interest on their MoMo balances.
We, therefore, strongly believe that the recent interest payout will encourage customers to develop a culture of savings and create wealth and opportunities for investment, especially in medium and small enterprises that use mobile money platform intensively.
We also hope that our customers will be able to transact and save more money on the MTN MoMo platform because there’s interest to be earned. We are now telling all those who have been keeping their money under the pillows, mattresses, and boxes that it is time to keep their money on the mobile money platform because it is safe, secure, and, earns interest.
How does MTN MoMo generate income that enables it to pay customers interest on their MoMo balances?
We work together with seven banks that act as our trust banks and do investments in treasury bills and bonds among other investment opportunities to earn returns. So, trust banks are usually holding real money while customers are usually holding money in virtual form. Therefore, the interest earned on the money held by banks during the three-month period is what is paid to our customers on their MoMo accounts.
What is your assessment of the performance of MTN Mobile Money business?
MTN MoMo has been recording a 30% year-on-year growth in terms of the number and value of transactions. This is a substantial growth by all measures considering the fact that very few businesses grow at such a rate.
MTN MoMo now has 10.3million customers who transact once every 30 days, and we are committed to ensuring that our 16.6million MTN Uganda customers transact at least once every 90 days. We don’t want to leave anyone behind. And, we are looking forward to sharing more of the economic value generated by MTN MoMo with customers, partners, customers, and, communities for the country’s transformation.
What are some other products that MTN MoMo has rolled out to the market as it strives to boost financial inclusion?
MTN MoMo continues to come up with new and exciting financial products to ensure that no one is left behind in relation to access to financial services. For instance, we have recently partnered with Jumo and unveiled MoSente, a new credit service that affords our customers more choice when it comes to mobile lending services as well as partnered with Xeno Investments to unveil a savings and investment product via the mobile money platform with the ability for customers to invest towards any financial goals. This is in addition to the Mokash service that we rolled out in partnership with NCBA Bank that enables our customers to save and access short-term loans at an affordable interest rate. MTN MoMo has also come up with an exciting new product known as MoMo Advance that enables MTN MoMo customers to access Advance Mobile Money Funds that they can use to complete their MoMo transactions and pay later. Our hope is that MoMo customers should be able to access all our financial services in one go.
Fraud has remained a big issue in the mobile money business segment. How is MTN MoMo dealing with this vice?
Fraudsters are indeed not sleeping. While we keep innovating and coming up with new products, fraudsters are always on the lookout to defraud our customers. Our analysis has shown that most of the MoMo frauds were through social engineering, where customers were called and shared their Personal Identification Numbers (PIN). We have come out strongly via radios and televisions as an industry including the regulators, Uganda Communications Commission and Bank of Uganda, and the payment providers association to create awareness about this vice and it will be sustained for a long time.
We also continue to enhance our applications since some fraudsters tend to target mobile applications. For instance, no one can download our app and use it remotely; he/she must be having a mobile phone with a simcard inserted in it and connected to our network. We, therefore, continue to boost the security within the platform to ensure that it is robust, reliable, secure, and super-efficient to serve our customers.
Meanwhile, our message to customers is: Keep your pin to yourself. A Pin shouldn’t be shared with any other person including your husband, wife, brother, sister, or mother. This pin is secret and unique to you alone as a customer.
Any specific areas of investment this year?
Our major area of investment for this year is hinged on enriching our MoMo ecosystem and platform capabilities. We are focused on scaling the adoption of our banktech products like loans and savings, payments, and e-commerce. We remain determined to attain a cashless economy, something that has been accelerated by Covid-19.
What is the future outlook of MTN MoMo’s business?
Initiatives such as paying interest to customers in line with the National Payment Systems Act 2020, present immense opportunities for our business. We’re seeing more and more people embrace our services, and in the process, we are also widening our service points to serve our customers better. We have a presence in 134 districts countrywide, with more than 171,000 Mobile Money agents, 200 service stores, and 16 main distributors. We also have 85,000 MoMo merchants and we want to triple that number in the course of next year, and that should be able to attract more customers onto our platform. We hope to continue entrenching MoMo pay across the country through strategic partnership engagements. So, the future is very bright for MTM MoMo.