Airtel Africa today announced the signing of an agreement under which Mastercard, a leading innovator and global technology company in the payments industry, will invest $100 million in Airtel Mobile Commerce BV (AMC BV), a wholly owned subsidiary of Airtel Africa plc.
AMC BV is currently the holding company for several of Airtel Africa’s mobile money operations and is intended to own and operate the mobile money businesses across all of Airtel Africa’s fourteen operating countries.
The Transaction values Airtel Africa’s mobile money business at $2.65 billion on a cash and debt free basis. Mastercard will hold a minority stake in AMC BV upon completion of the Transaction, with Airtel Africa continuing to hold the majority stake.
The Transaction is subject to customary closing conditions including necessary regulatory filings and approvals, and the transfer of specified mobile money business assets and contracts into AMC BV.
Raghunath Mandava, CEO of Airtel Africa, said: “With today’s announcement we are pleased to welcome Mastercard as an investor in our mobile money business, joining The Rise Fund which we announced two weeks ago. This is a continuation of our strategy to increase the minority shareholding in our mobile money business with the further intention to list this business within four years.
“We are significantly strengthening our existing strategic relationship with Mastercard to help us both realise the full potential from the substantial opportunity to improve financial inclusion across our countries of operation. The combination of our extensive customer base and distribution platforms and Mastercard’s products and services, innovation and know how, mean we can together accelerate demand and drive growth in financial services for the benefit of all our customers and markets.”
Alongside the investment, the Group and Mastercard have extended commercial agreements and signed a new commercial framework which will deepen their partnerships across numerous geographies and areas including card issuance, payment gateway, payment processing, merchant acceptance and remittance solutions, amongst others.
Following the announcement on 18 March 2021 of $200m investment in AMC BV by TPG’s The Rise Fund, and the sale of the Group’s telecommunication towers companies in Madagascar and Malawi on 23 March 2021, the Transaction is a continuation of the Group’s pursuit of strategic asset monetisation and investment opportunities.
As previously announced, Airtel Africa aims to continue to monetise its mobile money business with minority investments up to a total of 25% of the issued share capital of AMC BV, and to explore the potential listing of the mobile money business within four years.
The proceeds from the Transaction will be used to reduce Group debt and invest in network and sales infrastructure in the respective operating countries.
Airtel Africa mobile money services
Operating under the Airtel Money brand, Airtel Africa’s mobile money services is a leading digital mobile financial services platform catering to a large addressable market in Africa (characterised by limited access to formal financial institutions with limited banking infrastructure) and includes mobile wallet deposit and withdrawals, merchant and commercial payments, benefits transfers, loans and savings, virtual credit card and international money transfers.
Mobile money services are available across the Group’s 14 countries of operation, however in Nigeria the Group offers Airtel Money services through a partnership with a local bank and has applied for its own mobile banking licence. It is the intention that all mobile money operations will be owned and operated by AMC BV.
In our most recent reported results for Q3, the mobile money service segment (corresponding to all the businesses that are intended to be transferred to AMC BV) delivered a strong operational performance:
· Generated revenue of $110m ($440m annualised), and underlying EBITDA of
$54m ($216m annualised) at a margin of 48.7%.
· Year on year revenue growth for the quarter was 41.1% in constant currency, largely driven by 29% growth in the customer base to 21.5m, and 9.7% ARPU growth.
· Growth in transaction value was 53.0% to $12.8bn ($51bn annualised).
Our mobile money business benefits from strong network effects with our core telecom business through the extensive distribution platform of kiosks and mini shops as well as dedicated Airtel Money branches supplementing our extensive agent network, to facilitate customers’ assured wallet and cash.
We have a clear strategy to continue to drive sustainable long-term growth in Airtel Money with a focus on assured float availability, distribution expansion and increased usage cases for our customers.
In this year alone, in addition to Mastercard, we have added partnerships with Samsung, Asante, Standard Chartered Bank, MoneyGram, Mukuru and WorldRemit to expand both the range and depth of the Airtel Money offerings and to further drive customer growth and penetration.
The profits before tax in the full year ending 31 March 2020 and value of gross assets as of that date, attributable to the mobile money businesses were $143.4m and $463.2m, respectively.
Key elements of the Transaction
· Agreement values Airtel Africa’s mobile money business at $2.65 billion on a cash and debt free basis.
· AMC BV, a wholly owned subsidiary of Airtel Africa, is currently the holding company for several of Airtel Africa’s mobile money operations; and is intended to own and operate the mobile money businesses across all of Airtel Africa’s fourteen operating countries once the inclusion of the remaining mobile money operations under AMC BV is completed.
· Mastercard (through one of its wholly owned subsidiaries) will invest $100m through a secondary purchase of shares in AMC BV from Airtel Africa. The transaction will close in two stages. $75m will be invested at first close, once the transfer of sufficient mobile money operations and contracts into AMC BV has been completed, with $25m to be invested at second close upon further transfers.
· Airtel Africa aims to explore the potential listing of the mobile money business within four years. Under the terms of the Transaction, and in very limited circumstances (in the event that there is no Initial Public Offering of shares in AMC BV within four years of first close, or in the event of changes of control without Mastercard’s prior approval), Mastercard would have the option, so as to provide liquidity to them, to sell its shares in AMC BV to Airtel Africa or its affiliates at fair market value (determined by a mutually agreed merchant bank using an agreed internationally accepted valuation methodology). The option is subject to a minimum price equal to the consideration paid by Mastercard for its investment (less the value of all distributions and any proceeds of sale of its shares, and with no time value of money or minimum built in) and a maximum number of shares in AMC BV such that the consideration does not exceed $200m.
The Transaction is expected to reach first close over next three to four months. From first close, Mastercard will be entitled to certain customary information and minority protection rights.
Flutterwave Targets Share of $8 Million Ethiopian Remittances Market, Inks Deal with Amole
Flutterwave, Africa’s leading payments technology company, has announced its partnership with Amole, Ethiopia’s largest mobile Digital Wallet platform, to facilitate money transfer into Ethiopia through Amole, to Amole Wallet, bank accounts and cash pickup locations at over 2,500 locations across the country.
Amole offers its customers digital payment capabilities and access to digital products and services to enable users to complete essential transactions at their convenience.
The new partnership with Flutterwave will serve the Ethiopian economy by making diaspora remittances easier for over 8 million members of the Ethiopian Diaspora that remit over USD $5 billion annually to Ethiopia. International Money Transfer Operators (IMTOs) and businesses on Flutterwave as well as Barter by Flutterwave users can send money into Ethiopia via this partnership.
The remittance service in Ethiopia today is seen by users to be expensive, with manual paperwork and delays making it challenging and time consuming for the diaspora community. This partnership solves these problems by providing instant delivery of funds to the receiver at no fee, with more control of where and how to send money, including transparency from a regulatory standpoint.
According to a report by the National Bank of Ethiopia, over 75% of Ethiopia’s population is unbanked, while nearly 40% of all bank branches are in the capital city Addis Ababa. This collaboration will extend financial services to these underserved communities, by facilitating remittances from diaspora Ethiopians, hence expanding business opportunities for small and growing businesses in these communities. Subsequently, this will boost financial inclusion within the country as users of the service will have the option to collect cash from any of Amole’s 2,500 authorised agent locations.
Speaking on the partnership, Flutterwave Founder & Chief Executive Officer
Olugbenga ‘GB’ Agboola, said: “We are delighted to be collaborating with Amole to enable digital remittances and cash pickup into Ethiopia. This is another significant milestone for payments in Africa as we work together to bridge the financial inclusion gap in the country and across the continent. Our collaboration will ensure that Ethiopian businesses are getting paid from all over the world, opening massive opportunities for business growth, a goal we are passionate about. This is just the beginning, and we hope to deepen the discussions around our partnership to the benefits of Africans, everywhere.”
Asfaw Alemu, CEO of Dashen Bank, said: “We are happy to partner with Flutterwave in delivering crucial forex that will support both our customers and Ethiopia. This partnership will play an important role in delivering even more value to our diaspora community, linking them to their country with more opportunities for global eCommerce in the near future.”
Yemiru Chanyalew, CEO Moneta Technologies, SC – said: “We are very excited to work with Flutterwave and leverage our combined technologies to broaden our offering to the Ethiopian Diaspora community, our customers and merchants to enable cross-border remittance and commerce. At Amole, we are increasingly focused on cashless and eCommerce payments. Our combined efforts in enabling seamless and interoperable remittance and eCommerce payments will drive much desired financial inclusion in Ethiopia.”
To make payment via this new service, a sender outside Ethiopia inputs the details of the receiver in Ethiopia, the payment destination (Amole digital wallet, bank account, or cash pickup location anywhere in Ethiopia), and the security question and answer with which the receiver can access the funds if the preferred payment destination is via an Amole authorized agent.
Mercy Corps Partners YDFS to Deliver Cash Transfers to Vulnerable Households in Yobe State
Mercy Corps’ ‘Building Resilience in Complex Crisis (BRICC)’programme funded bythe European Union,has signed a new partnership with Y’ello Digital Financial Services (owners of the MoMoAgent Network),a subsidiary of MTN Nigeria,to efficiently deliver automatedcash transfers and provide an avenue for programme participantswith or without bank accounts to receive funds.
This partnership will kick-start the use of MoMo Agent in the distribution of conditional and unconditional cash transfers to 14,270 households in Damaturu and Potiskum LGAs in Yobe state.
The European Union is funding Mercy Corps to implement an array of early recovery interventions across North-East Nigeria which involves cash assistance to vulnerable households and young people to help restore and improve livelihoods,making them more resilient to conflict and climate shock and stress.COVID-19 has aggravated the impact of the conflict in the state, affecting market opportunities and increasing unemployment. Of the participants that will be given cash transfers, 1,570 youths will receive funds to help them start a business after undergoing vocational training like automobile repairs, agribusiness, fashion designing, food business, and phone repairs, among others.
Dez Byamukama, BRICC Programme Director, Mercy Corps said, “The major goal of the BRICC programme is to build the resilience of communities, by providing them with the capacity and resources to respond to shocks and stresses, which have been worsened by the COVID-19 pandemic. Cash supports beneficiairies to respond to their basic needs and survive economic hardship, Automated cash transfer also reduces the cost and security risks associated with the transfer and direct distribution of cash.”
The presence of MoMoagents in communities where BRICC is implemented, means faster and more efficient means of delivering cash transfers without participants having to wait in long queues.With an agent base of over 150,000 across the country, MoMo Agents provide safe, fast and easy access to financial services for customers through their widespread presence and reliable service.
This partnership with Mercy Corps provides a unique opportunity to extend these benefits to the most vulnerable families in Yobe State and other conflict-affected states in the North East.
Commenting on the collaboration, Usoro Usoro, Chief Executive Officer, Y’ello Digital Financial Services said his organisation is commitedto ensuring that every Nigerian is able to seamlessly access financial services for their personal and business needs. “To do this, we constantly seek partnerships to support the financial inclusion strategy of the federal government. We are truly excited about this arrangement with Mercy Corps and the possibilities. With over 150,000 agents spread across the country, we are poised to deliver easy and fast cash transfers to beneficiaries of the programme in Yobe State and other locations within the country where required,” he stated.
EU Head of Cooperation,Tassin-Pelzer Cecile, also commended the initiative, noting that cash transfers are often more efficient and effective than other forms of aid. She said: “Cash provides beneficiaries with the means and flexibility to decide and prioritise their recovery. In many contexts, cash assistance allows more aid to reach the beneficiaries directly. It also supports local markets and economy, laying the foundations for communities’ recovery and resilience. Cash transfers are effective in addressing negative-coping strategies such as poor diets or debts. It is very important that Mercy Corps continuous to work with the government to strengthen the State Social registry of the most vulnerable linking beneficiaries with the social protection programme.”
MTN Nigeria’s YDFS Partners Bet Operators As Mobile Mobile Agents
Y’ello Digital Financial Services (YDFS), a subsidiary of MTN Nigeria, has announced its partnership with gaming operators, Betway, BetPawa and Betmojo through its flagship mobile money transfer service, MoMo agent.
The strategic partnership will enable customers to cash their winnings and fund wallets conveniently at any MoMo agent outlet nationwide.
Chief Executive Officer, YDFS, Usoro Usoro,said the “partnerships are the fuel for progress within our communities. So, we are constantly exploring innovative relationships to help deliver cost-effective, fast, transparent, and reliable remittance services.
“Our customers deserve simple solutions making it easier for them to access financial services, no matter where they are. Our partnership with gaming operators helps deliver that,” Usoro added.
Speaking on the partnership, Lere Awokoya, Betway’s country manager said, “We are proud of our collaboration with MoMo. Our customers now have easier access to their Betway wallet guaranteed. Customers can also deposit and cash-out wins with their neighbourhood MoMo Agent.”
“We are committed to improving our customer’s experiences through a more personable, digital and sustainable approach. This partnership provides that. We look forward to a successful working arrangement that continually keeps the customer in focus,” added Segun Somefun, CEO, Betpawa
Betmojo customers can also take advantage of the partnership through the ‘Pick 3’ game on the platform to cash out on their winnings with MoMo. With an agent base of over 300,000 across the country, MoMo Agent forms a major part of the Central Bank of Nigeria’s financial inclusion drive to ensure that 95 per cent of adults are financially included by 2024.
The partnership allows customers to utilise MoMo’s widespread presence and reliable service to access funds. MoMo Agent services include bill payment, cash deposit and withdrawal, data and airtime purchase, and a bulk disbursement solution which enables public and private companies to make payment to beneficiaries anywhere in Nigeria without a bank account or ATM availability.
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