MTN Rwanda has received approval from the Central Bank to set up its FinTech subsidiary, Mobile Money Rwanda Ltd, in a move that is likely to intensify competition in the financial system.
The firm, which was given the mandate to run the telecom's mobile money operations effective April 27, 2021— will be headed by Chantal Kagame.
As the Chief Executive Officer Kagame is tasked with driving business development, strategy, innovation, and day-to-day operations of the company.
The setting up of FinTech, the company said is in line with its strategy to lead digital solutions while contributing to the national economic strategy on enhancing cashless transactions that offer convenience.
The development positions the firm ideally to make the most of their current market position where out of about 6 million clients, 3.2 million of them are active mobile money users.
Active mobile money users are clients who have used Mobile Money in the last 30 days. Of the 3.2 million users, the firm’s officials say that 2.4 million customers use MoKash for both saving and taking loans.
This new firm could pose stiff competition to banks which have seemed to struggle to have relevance in the local market given then only 36 per cent of adults are formally banked (2.6 million out of about 7 million adults as of 2020).
According to the 2020 Finscope survey findings, financial inclusion in the country has largely been driven by mobile money technology.
MTN Rwanda Chief Executive, Mitwa Ng’ambi said that the new structure is also expected to ensure that the business segment is agile and well-poised for growth and innovation.
"Mobile Money has matured over the last ten years in Rwanda, and this marks a pivotal milestone in our journey toward a cashless economy,” she said.
Chantal Kagame the new Chief Executive said that the segment's prospects for future growth and expansion of Mobile Money services in Rwanda are immense.
"The transition process to a standalone business has now kicked off and we look forward to cementing Mobile Money Rwanda Ltd as a key FinTech player in the Rwandan market,” she said.
This comes days before MTN Rwanda’s listing on the Rwanda Stock Exchange where 1,350,886,600 ordinary shares will be registered at an initial listing price of Rwf269 per ordinary share.