Cash shortages drops MTN’s fintechs’ revenue by 39.4%

The effects of cash shortages on over-the-counter (OTC) transactions during the first quarter of 2023 impacted negatively on MTN’s Nigeria revenue from fintech customers.

The company, which disclosed this in its first half of 2023 financial results, said it reported a 39.4 percent decline in its fintech customers for the half-year 2023, bringing its users down to 7 million at the end of June.

According to MTN, out of the 7 million fintech customers, 3.1 million are MoMo wallet users, representing 44 per cent of its total fintech customers.

Despite the decline in customers, MTN said it recorded a 7.8 per cent growth in fintech revenue. Its fintech revenue for the first six months of this year stood at N43.6 billion compared with N40.4 billion recorded during the same period last year.

The report also said that the naira devaluation impeded the company’s financial growth in the second quarter of 2023, recording a forex loss of N131.5 billion, an increase of N 117.9 billion from the N13.6 billion forex loss reported in the first of 2022.

MTN reported that the Central Bank of Nigeria’s recent forex operations changes caused a significant 60 per cent movement in the exchange rate to N756.24/US$ by the end of June 2023.

The telecom giant’s second-quarter results show pre-tax profits fell a whopping 64 per cent to N44.6 billion, taking off its half-year profits to N200.3 billion compared to N268.6 billion in the same period in 2022.

Explaining the reasons for the company’s fintech business poor performance in the period under review, MTN’s Chief Executive Officer, Mr Karl Toriola, said the firm’s fintech user base was impacted by the effects of the cash shortages on over-the-counter (OTC) transactions during the first quarter of 2023.

Toriola noted that the fintech business remains a crucial priority for MTN as it continues to put structures in place to support the execution of its growth strategy and scale the fintech ecosystem in line with our Ambition 2025 strategy.

In that regard, he said the company would ramp up its fintech campaigns to create more awareness.

Meanwhile, MTN recorded 49.9 per cent growth in its digital revenue for the period under review.

According to the company, this was bolstered by revenue from rich media services and content VAS.

Toriola said the digital revenue growth was also supported by the adoption of digital products and the development of the active base, up 56.6 per cent to 14 million.

“In H1, we bought Amazon Prime Video and Apple Music to our customers, expanding our rich media services portfolio. Ayoba, our instant messaging platform, continued to gain traction with the addition of over two million users, bringing the monthly active users to 7.2 million in H1.