MTN Nigeria has proposed merging its two finance subsidiaries, Momo Payment Service Bank Limited and Yello Digital Financial Services Limited.
The telecommunications firm revealed this in a document labelled “Explanatory Notes To The Resolutions To Be Proposed At The 2023 Annual General Meeting (AGM).”
Giving a clue to the drive behind this proposition, the company explained that the proposed merger would “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.”
In the document, MTN Nigeria conjured major stakeholders of the company to demonstrate a consensual alliance with the motion for the merger at their forthcoming annual general meeting (AGM) scheduled for Tuesday, April 18, 2023.
“It has been proposed that two of the company’s subsidiaries (MoMo PSB and YDFS) be merged and integrated to form one company, which will 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. It is anticipated that the merger will enhance the value for the company and its shareholders. Kindly vote in favor of the motion for the merger of MoMo PSB and YDFS,” the director stated in the document.
Momo Payment Service Bank Limited kicked off in 2022, and its enormous rise through its nascent stage has blown the minds of many away. MTN Nigeria Communications Plc’s payments unit was launched the same day fierce rival Airtel Africa floated their idea of a similar concept.
A quick cue of how amazingly exciting Momo has been in the past year of its launch: in August last year, less than two months after its launch, Momo recorded 4.2 million wallets. Out of these 4.2 million wallets, the multinational telecommunication 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.
Regarding Momo PSB, Karl Toriola, MTN Nigeria’s CEO, said it demonstrates solidarity for the federal government’s “drive towards financial inclusion in Nigeria.”
He added, “Not just for those in urban centers and markets, but also people in rural and remote areas of the country who remain excluded from the financial system.”
On the other hand, Yello Digital Financial Service (YDFS) is a subsidiary of MTN Nigeria, which secured a license to begin operations from the Central Bank of Nigeria in 2019. In June 2018, YDFS, registered as a financial technology company in a bid to meet the criteria for a CBN license, was created; it is MTN’s core foothold in Nigeria’s financial ecosystem. MTN Nigeria’s CEO, Ferdi Moolman, said,
“Through the network established by YDFS, MTN is in a position to broaden the availability of financial services for the underserved across the country. This marks a very important first step in leveraging our infrastructure to scale our fintech initiatives.”