Uganda’s biggest Fintech, MTN Mobile Money (MoMo), is moving out of the family home.
Long treated as just another product line within the telecom’s machinery, MoMo is being carved out into a separate corporate entity—MTN New FinCo—with ambitions to scale faster, partner globally, and perhaps one day join Africa’s elusive unicorn club.
It’s a shift more than a decade in the making.
Launched in 2009, MoMo lived for years as a revenue-generating cog inside MTN Uganda’s telecom engine. Its financials were buried within a blended mix of voice, data, and airtime earnings.
Even after the 2021 National Payment Systems Act forced telcos to legally separate their financial services—leading MTN to register MTN MoMo Uganda Ltd as a wholly owned subsidiary—its numbers remained consolidated under the parent’s financial statements.
Shareholders even received dividends that mixed telecom and Fintech income into a single cocktail.
Now, that cocktail is being uncoupled.
Under the new structure, MoMo will no longer fall under MTN Uganda. Instead, it will be housed under MTN Group Fintech – MTN New FinCo, joining a growing portfolio of digital finance platforms operating across the continent.
The move is aligned with Ambition 2025, MTN Group’s strategy to evolve from a traditional telecom operator into a platform-led tech company.
One of the strategy’s core pillars is to “build valuable platforms,” with financial services—particularly mobile money—seen as a prime growth engine.
In essence, MTN is betting that MoMo can be more valuable—and more agile—when unshackled from the bureaucracies and capital burdens of telecom infrastructure.
By giving MoMo its own strategy, governance, and reporting cycle, MTN hopes to attract dedicated Fintech capital, secure deeper partnerships, and unlock opportunities that a telecom shell simply couldn’t support.
Think of it as a talented graduate leaving their family’s business to launch a startup: same DNA, new ambition.
Why Split? Three strategic reasons
1. Different DNA
Telcos and Fintechs are built on contrasting foundations. Telcos pursue Average Revenue Per User (ARPU), erect towers, and follow capital-intensive models regulated by communications authorities.
Fintechs, by contrast, chase user numbers, build lean digital platforms, and are governed under financial regulation.
MoMo’s rapid evolution into a multi-product Fintech — handling payments, savings, credit, and remittances — demands its own controls: cybersecurity, anti-money laundering, and data privacy. It needs Fintech-style governance, not telco-style compliance.
2. Strategic Flexibility
Housing MoMo within a telco structure limits MTN’s ability to strike partnerships or attract Fintech-focused investors.
Global players—such as Mastercard, Visa, or Ant Group—often prefer clean, standalone Fintechs for joint ventures or acquisitions.
Unbundling gives MTN a clearer path to strategic alliances, cross-border acquisitions, or even regional mergers.
3. Scale and Speed
Fintech is a scale game—and scale requires speed. MoMo’s potential depends on how quickly it can launch new products, deepen financial inclusion, and expand its ecosystem.
A separate playbook enables MoMo to move at Fintech velocity, not telco tempo.
A fintech force in the making
Freed from its parent’s legacy structure, MoMo now stands to become one of the continent’s most formidable financial platforms.
With a strong user base, real-time transaction rails, and a trusted brand, it has the muscle to compete not only with telecom-linked Fintechs like Airtel Money or M-Pesa, but also with digital-native challengers, and MTN Group knows it.
MTN insists current shareholders won’t lose out in the separation.
The plan is that instead of one pot, they’ll now have two: distinct dividends, governance rights, and reporting lines from both MTN Uganda and the newly formed MTN New FinCo.
MTN also emphasizes in notes to investors seen by the CEO Magazine that minority shareholders in Uganda will still have economic exposure to the Fintech business through a specially incorporated Trust.
Their voting rights and ability to participate in general meetings at MTN New FinCo, MTN Uganda says, will be preserved in proportion to their shareholding.
Still, this isn’t the IPO story investors originally bought into in 2021—a bundled bet on telco stability and Fintech upside.
Now, they must follow two diverging narratives, with different growth arcs and risk profiles.
A shift in control
Beyond the legal logistics, the restructuring subtly transfers the Fintech wheelhouse from MTN MoMo to the MTN Group.
Strategic control—and future profit streams—are gradually realigning toward the Group’s pan-African ambitions.
Ugandan investors retain economic exposure, yes, but the centre of gravity moves elsewhere.
This has been long in the works. MTN hinted at this path as early as the 2021 IPO prospectus and reinforced it in subsequent reports and its recent secondary sale (May 27–June 12, 2024).
MoMo’s separation is not a pivot—it’s Act II of a larger plan.
Act I unfolded in 2021 when MTN, complying with the National Payment Systems Act, carved out MTN MoMo Uganda Ltd. That was an internal legal restructuring. Act II is more surgical: a full corporate amalgamation into MTN New FinCo.
Think of MoMo relocating from the family home to a sleek, tech-forward apartment—built for speed, scale, and investment appeal.
For customers, operations remain unchanged. Payments, wallets, and services continue seamlessly.
Behind the scenes, however, a full legal transition is under way—pending final regulatory approvals and licensing from the Bank of Uganda.
The mechanics
MTN New FinCo becomes the new operating company, right under MTN Group. MoMo’s systems, staff, and contracts move over, intact.
MTN New FinCo has been deliberately designed to operate as a leaner, more agile Fintech—regulatory-ready, investor-friendly, and fit for continental scale.
MTN maintains this isn’t a retreat from Uganda, but a recalibration for acceleration. The Group promises that strategic coordination between telco and Fintech arms will continue.
The minority shareholders’ 23.985 percent stake in MTN Uganda remains. That stake will be mirrored in MTN New FinCo—held indirectly via a Ugandan-incorporated Trust.
The idea is that when you buy more MTN shares, and your Fintech exposure scales up. Sell some, and both your telco and Fintech stakes shrink.
The Trust, administered by a corporate trustee, holds a 23.985 percent stake in MTN New FinCo and acts as a pass-through for dividends. It doesn’t trade, hold unrelated assets, or trigger income tax at the Trust level. A shareholder would only pay withholding tax—like before.
MTN is seeking a private tax ruling from Uganda Revenue Authority to confirm the structure’s compliance and tax efficiency.
Here’s the rub, however: dividends from MTN Uganda attract a 10% withholding tax for Ugandan individuals. MTN New FinCo’s dividends will be taxed at a flat 15%, regardless of residency.
To cushion this, MTN Group Fintech will create a second trust—the Dividend Adjustment Trust—to refund the extra 5% to local investors.
Every time MTN New FinCo pays dividends, it withholds 15%, then MTN Group Fintech tops up the 5% shortfall to the Adjustment Trust, which passes it on to eligible shareholders.
The fix is elegant: trusts are tax-neutral conduits. No double taxation, no loss of income.
Strategically, it’s a smart hedge. Increasing tax on local investors risks undermining public market confidence. MTN’s decision to absorb the impact signals strong corporate governance—and an awareness of market optics.
The second Trust only applies to Ugandan individuals, avoiding windfalls for offshore or institutional investors already accustomed to the 15% rate.
Unbundling on the horizon
This twin-trust structure isn’t permanent. Within three to five years, MTN plans to unbundle the Trust. Minority shareholders will then receive direct shares in MTN New FinCo.
At that point, MTN New FinCo will convert to a public company and list on the stock exchange, most likely via a “listing by introduction.”
No new shares, no fresh capital raising—just registration for public trading. Liquidity, without dilution.
Given the 20,000+ shareholders in MTN Uganda, the listing offers clarity, control, and flexibility—exposing MTN New FinCo to market valuation, and unlocking additional shareholder value.
Ahead of the listing, an independent valuer will provide a fairness opinion, reviewed by the Capital Markets Authority and the USE to ensure transparency.
The timeline hinges on market conditions, board approvals, and MTN New FinCo’s operational readiness.
Impact
MTN will continue paying dividends as usual, while MTN New FinCo will distribute its profits to both MTN Group and the Trust.
However, since MTN New FinCo won’t be listed at inception, Ugandan retail shareholders will face a higher withholding tax of 15% (up from 10%).
To counter this, MTN plans to put up a dividend adjustment mechanism within the Trust that would ensure net payouts remain tax-neutral.
Voting rights are preserved, enabling minority shareholders to influence MTN New FinCo’s decisions either directly or by proxy.
MTN’s board will remain intact, and directors from the current MoMo team will guide MTN New FinCo in its formative stage, ensuring governance continuity.
Employee contracts, customer relationships, and supplier agreements remain undisturbed—ensuring operational calm during the corporate pivot.
On regulatory compliance, the transaction hinges on Bank of Uganda’s formal approval under the National Payment Systems Act.
Routine notifications have been made to entities such as Uganda Communications Commission (UCC), Capital Markets Authority (CMA), and Uganda Revenue Authority (URA), with no-objection letters issued by CMA and USE, subject to conditions.
MTN Uganda told its shareholders in a circular that MTN Group will shoulder incorporation and restructuring costs, while MTN New FinCo will cover the Trust’s administration going forward.
Hidden trade-offs
The proposed spin-off of MTN MoMo into MTN New FinCo brings not only structural and strategic implications but also distinct accounting consequences that redefine how investors and analysts will interpret MTN Uganda’s financial health.
As of 31 December 2024, MTN Uganda and MTN MoMo reported standalone results that were later consolidated under IFRS guidelines.
MTN Uganda posted UGX2.3 trillion in revenue from contracts with customers, while MoMo contributed UGX 982 billion—culminating in consolidated revenues of UGX3.17 trillion.
On earnings before interest, tax, depreciation and amortization (EBITDA), MTN Uganda contributed UGX1.56 trillion, and MoMo UGX394 billion, summing to UGX 1.66 trillion consolidated.
Net profit for the group stood at UGX642 billion. These figures paint a picture of a telco giant with a high-margin Fintech engine embedded within.
However, the proposed transaction will uncouple these financials. Post-separation, MTN Uganda’s financial statements will no longer reflect MoMo’s earnings or assets.
This marks a material shift in how investors will value the business.
The balance sheet impact is equally significant. Consolidated total assets stood at UGX4.67 trillion, with MTN Uganda holding UGX2.8 trillion in non-current assets and MoMo UGX123 billion. Liabilities totalled UGX3.47 trillion, and total equity stood at UGX1.2 trillion.
Once MTN MoMo is spun off:
MoMo’s UGX123 billion in non-current assets and its associated liabilities will exit MTN Uganda’s books.
Any intra-group balances—such as the UGX303 billion dividend paid by MoMo to MTN—will no longer be eliminated through consolidation, because they will become arm’s-length third-party transactions between separate legal entities.
This could inflate MTN Uganda’s reported revenue or finance income (depending on how future MoMo dividends are structured), but the underlying business activity remains unchanged.
With the Fintech business carved out, MTN Uganda will present a leaner income statement. Revenue and EBITDA will decline nominally—but more crucially, profit margins may narrow, since MoMo’s digital services enjoy higher margins than traditional voice or data.
Ugandan enterprises urged to explore regional oil and gas opportunitiesFor example: MTN’s standalone EBITDA margin is lower than the consolidated figure (UGX1.56 trillion vs UGX 1.66 trillion on a UGX 3.17 trillion base).
Investors valuing the company purely on margin metrics may perceive a decline in profitability, unless they account for the spin-off.
Regulatory dependencies
From an accounting treatment perspective, this transaction is subject to regulatory sign-off from the Bank of Uganda under the National Payment Systems Act—critical, since MoMo operates in a regulated Fintech space.
Approvals or notifications are also underway with: labour authorities (for employee transfer), NITA-U (data and digital infrastructure), NSSF (pension continuity), URA (tax neutrality), and URBRA (in case of pension service overlaps).
Although CMA and USE have issued no-objection letters, final execution hinges on the BoU green light.
No competition or antitrust filings are currently needed, as the entities remain under the MTN Group umbrella—at least initially.
But this clarity comes at a cost. Without consolidation, MTN Uganda may appear weaker in terms of scale, profitability, and asset base—unless investors zoom out and consider the aggregate value of the group.
Risks
The success of the separation hinges on two key approvals—shareholder consent at an Extraordinary General Meeting (EGM) and regulatory greenlighting from the Bank of Uganda. Either could delay or derail the process.
Third-party consents from lenders, suppliers, and customers are being proactively sought, though management expects few obstacles.
On tax, independent opinions and rulings from the URA indicate the deal will be neutral on VAT and capital gains—mitigating a major risk.
That said, uncertainty persists. Dividend declarations by both MTN and MTN New FinCo remain discretionary, subject to board approvals and financial health.
Macroeconomic volatility could also pose headwinds. Investors are warned that share price fluctuations could follow, driven not just by the transaction, but by broader market sentiment.
A Collaboration Agreement ensures the Fintech unit transitions smoothly while group-wide synergies continue.
Operational and strategic arrangements—such as intercompany services, transfer pricing, and commercial agreements—will remain in place, guided by arms-length principles and aligned with existing intra-group protocols.
These will survive even after the Trust distributes MTN New FinCo shares directly to minority shareholders.
Fintech rich, telecom leaner?
In 2024, MTN Uganda reported revenue of UGX3.17 trillion ($857 million), up 18.87% from the previous year’s UGX2.67 trillion ($721 million).
Fintech contributed UGX958.53 billion ($259 million)—nearly a third of total revenues. MoMo alone boasts 13.8 million subscribers, out of MTNU’s 22 million customer base.
Since its 2021 USE listing, the Fintech unit has powered MTN Uganda’s growth engine. Now, it’s being asked to stand alone.
Bloomberg reports that MTN Group intends to carve out its Fintech units in Ghana, Uganda, and Nigeria in the first half of 2025. For MTN Uganda shareholders, this raises the question: will the sum of the parts exceed the whole?
Analysts at Crested Capital have modeled scenarios with and without Fintech. Their conclusion: while the split may dilute consolidated revenue and profits in the short run, it could unlock hidden value, attracting investors who want focused exposure to either telco or Fintech.
The market’s reaction may hinge on how convincingly each entity performs on its own.
Financially, MTNU remains formidable. It posted a 30.11% surge in profit after tax (UGX641.55 billion or $173.4 million) in 2024—cementing its place as the most profitable company on the USE, ahead of Stanbic Uganda Holdings and Airtel Uganda.
Key profitability ratios improved sharply. Return on Average Assets jumped 30.44%, Return on Equity climbed 10.26%, and both EBITDA and net profit margins rose, signalling operational discipline even in a challenging macroeconomic environment.
Shareholder returns: Yield, uncertainty, and the politics of value
MTN Uganda’s 2024 dividend payout—UGX506 billion or $136.8 million—represents more than a financial transfer; it’s a signal. With a yield of 8.35% at the current share price of UGX270.5, MTNU continues to present itself as a generous income stock in a market short on stable, yielding investments.
The slightly lower yield compared to 2023 may raise eyebrows, but the absolute payout size, consistency of dividend declarations, and strong earnings base still paint a picture of a cash-generating machine.
For many Ugandan investors—especially pension funds and retail savers—the company’s dividend discipline remains its single most attractive feature.
But yield alone does not tell the full story. MTNU’s dividends have been underwritten by strong cash flows, powered in large part by its Fintech arm, MTN MoMo. The problem now is that this engine of growth is being quietly unbolted from the chassis.
In spinning off MoMo into a separate private Trust structure—outside the boundaries of the public market—MTNU risks diluting the very cash flows that have supported its generous payouts.
And yet, shareholders are expected to hold the same level of confidence in a leaner, potentially slower-growing telco business. This is not a minor shift; it’s a fundamental reshaping of the economic promise investors bought into.
Still, the public market has shown faith—at least until recently. Following the June 2024 secondary offer, where MTNU offloaded a 20 percent stake at a discount, the share price has appreciated by over 93%.
That rally was driven by strong demand and renewed liquidity as institutional lock-up periods expired. The stock now commands over two-thirds of all turnover on the Uganda Securities Exchange.
MTNU became the story of local capital markets—proof that listings could work, that retail investors could gain, and that institutional capital was willing to show up.
However, this bullish narrative has developed a fault line. When the company announced the Fintech spin-off, the market flinched.
The share price fell by 3.33%—from UGX270 to UGX261—on what could partly be attributed to ex-dividend trading. But deeper in that move lies a question: what happens when the crown jewel is no longer on display?
MoMo contributes nearly a third of MTNU’s total revenue and an even higher share of EBITDA margin. Stripping it away without offering a public roadmap or financial projections leaves investors exposed to a major valuation blind spot.
Some market optimists argue this is a smart move—decoupling MoMo could unlock hidden value.
Fintech, they say, deserves a different valuation multiple, possibly attracting global investors if it’s eventually listed.
MTNU shareholders might one day benefit from “double dividends”—one from the telco and another from MoMo, should it be spun out as a listed entity.
But this vision is clouded by time and uncertainty. Management has cited a three- to five-year horizon for any potential MoMo listing.
That’s an eternity in capital markets—especially for retail investors who lack visibility into the governance and performance of the trust structure in the interim.
And herein lies the most serious investor concern: governance opacity. The proposed private trust that will hold MoMo is not subject to public market regulations. There are no clear obligations for disclosure, no public board elections, and no established dispute resolution mechanisms that shareholders can access.
For institutional investors like NSSF, this raises tough questions: will they still have oversight? Will dividends from the trust flow back consistently to MTNU, or will value slowly drift into a less accountable entity? These questions cut to the heart of investor protection, especially in a market still building credibility.
Uganda has made meaningful progress in capital market development in recent years, with listings showing symbolic victories of improved retail participation, IPO enthusiasm, and regulatory maturation.
Allowing a major listed company to carve out its most profitable unit into a private vehicle—beyond the reach of ordinary shareholders—risks eroding those gains.
It sets a precedent that success in the public market can be selectively privatized, undermining trust and weakening the social contract that public listings imply.
The current structure poses three major risks. First, liquidity risk: reduced transparency on the Fintech unit may deter active trading and spook short-term investors. Second, valuation risk: without financial models or visibility into MoMo’s growth trajectory, pricing MTNU accurately becomes guesswork.
Third, and most serious, governance risk: a trust does not have the same fiduciary obligations or shareholder protections as a listed entity. In an environment already marked by regulatory fragility, the market’s demand for transparency is not just symbolic—it’s structural.
In sum, MTNU’s dividend yield may still glitter, but beneath it lies a paradox. Investors are being asked to trust what they can no longer see.
The company must make a choice: either restore transparency and offer a clear roadmap for MoMo’s future within a framework of investor protections—or risk alienating the very market that helped it thrive.
Keneth Legesi, an investment associate and the CEO/CIO of Ortus Africa Capital does elaborate on his substack that this is a pivotal corporate event, not just for MTN Uganda, but for how African capital markets handle the ownership of high-growth assets like Fintechs.
The question here is that how can investors in African (frontier) markets extract the most return per unit of risk and actually retain control of the value they help create?
“Too often, the answer is: they can’t. Because while they may appear to own a stake, the underlying structure tells a different story one where control, transparency, and access to upside quietly slip away,” he says.
Plus, this separation has no guaranteed liquidity.
“While there is mention of a future listing for MTN New FinCo, there is no fixed timeline, no legal commitment, and no mechanism ensuring that trust units will be converted into listed equity. Investors are being asked to wait indefinitely without clarity on when or how they can access the value they’re promised,” he adds.
And the structure offers no assurance of performance transparency. If the FinCo remains unlisted for years, there is no obligation to publish detailed financials.
Yet this business will likely be one of the most valuable and fastest-growing component of the MTN ecosystem in Uganda.
We’ve seen this movie before—and it rarely ends well for the small investor.
The illusion of ownership in frontier markets
Across African frontier markets, a recurring pattern has emerged: local investors are granted exposure to high-growth sectors—especially telcos and Fintech—but without the rights that true ownership demands.
From Tigo Tanzania’s unfulfilled IPO, to Jumia’s offshore listing in New York, to Ethiopia’s exclusion of bank investors, and Zambia’s ZCCM-IH’s policy-first approach, the lesson is consistent: exposure without control is not ownership.
“These structures may promise returns, but they rarely provide real influence. If you can’t vote, can’t see the financials, and can’t sell when you want to, then you’re not an investor. You’re just carrying the risk—without any power to shape or benefit from how it’s managed,” Legesi writes.
A systemic problem across african markets
Retail and institutional investors alike have fallen into this trap. The tools vary: offshore listings, opaque trust structures, and related-party governance that subtly separate them from the real engines of value.
The result? Limited control, minimal transparency, illiquidity and weak accountability
This is not an isolated flaw. It’s a systemic design that limits the growth of African capital markets. When risk is decoupled from rights, investors are reduced to passive bystanders, not true partners in enterprise growth.
Uganda’s moment
This matters deeply for Uganda.
The argument here among practitioners in domestic capital markets is that if Uganda is serious about building deeper and more inclusive capital markets, then this MoMo restructuring proposal is a crucial litmus test.
“It must be about more than just showcasing listings. It must be about ensuring that those who invest in Uganda’s economic future are treated as full stakeholders,” says Legesi.
Investors know that capital formation is not just about access to returns—it’s about trust. And trust is built through three investor pillars: visibility (transparency), voice (governance rights) and voluntary exit (liquidity and choice).
Strip these away and what remains isn’t ownership—it’s exposure without a parachute.
Africa’s Fintech future offshore?
MTN MoMo is Africa’s most systemically important Fintech. It is a byproduct not only of MTN Group’s strategy but also of the enabling environment in markets like Uganda, from policy frameworks to infrastructure and customer adoption.
Yet under the proposed trust structure, the value being created locally could be captured almost entirely by MTN Group, with Ugandan investors left on the sidelines, holding shares in a telco with diminishing growth potential.
If that model spreads—where African countries provide the risk, infrastructure, and user base, but miss out on the reward—then the entire Fintech investment model becomes extractive, not inclusive, Legesi reasons.
He says there is a better way to this because this restructuring doesn’t have to be a zero-sum game.
“A more balanced alternative would: Allocate a portion of FinCo’s shares directly to MTNU’s current shareholders, perhaps held in escrow pending regulatory approvals, commit to listing FinCo on the USE within a fixed timeline, mandate quarterly financial disclosures, and embed strong shareholder protection mechanisms—such as pre-emptive rights and arm’s-length commercial agreements,” Legesi says.
This way, he adds, Bank of Uganda’s ring-fencing goals are met, while local investors retain real economic interest and influence over a business they helped build.
This isn’t just a restructure—it’s a precedent
If MTN Uganda proceeds with this opaque spin-off, minority shareholders could be left in the dark with exposure but without control, dividends without decision-making and valuation without visibility
This is not real investing. It’s a gamble on management goodwill—with no clear exit plan and investors know it.
And this decision is bigger than one company or one extraordinary general meeting. It sets the tone for how African public markets treat their own people in the most promising sectors.
Legesi argues that if Africa wants its citizens to invest in its future, it must give them real seats at the table.
This proposed separation is still in its infancy. Shareholders, regulators and the state are watching closely to make it as fair as possible but it could have larger implications for the minority shareholders should it fail to be handled fairly.
