MTN engages stakeholders over MoMo partner Ubank
MTN SA is in conversation with the relevant authorities following the decision by the South African Reserve Bank (SARB) to place its Mobile Money (MoMo) partner Ubank under curatorship.
The mobile operator has been in partnership with Ubank since 2020, when it relaunched the MoMo service in SA, targeting the bank’s strong footprint in rural areas and mining communities.
At the time, then MTN CEO Godfrey Motsa said “failure was not an option” for MoMo. The operator is now exploring if the curatorship of its partner will impact service, although at the moment the platform remains uninterrupted.
MTN relaunched is MoMo platform in SA in 2020, about four years after the service failed to take off in the country.
SARB governor Lesetja Kganyago this week placed Ubank under curatorship, saying the Prudential Authority has intensified its supervision of Ubank due to corporate governance concerns, a high number of internal control weaknesses, and the prolonged period it has taken to secure the injection of sufficient capital to comply with the minimum capital requirements.
“After having duly considered the seriousness of the issues facing the bank, and given that Ubank is unlikely to immediately meet its obligations as required by the Banks Act and the Regulations relating to banks, the minister of finance, in consultation with the Prudential Authority, has decided to place Ubank under curatorship with immediate effect.
“This is being done to proactively mitigate the adverse consequences on Ubank's depositors, and to preserve the stability of the South African banking and financial services sector as a whole,” says Kganyago.
MTN SA’s executive for corporate affairs, Jacqui O’Sullivan, tells ITWeb: “MTN is engaging with the relevant stakeholders, following the decision by the South African Reserve Bank to place Ubank under curatorship. As noted by the SARB, Ubank continues to be open for business.”
MoMo services, which are part of the telco’s fintech business, have been growing rapidly in SA.
As of 31 March, the telco had approximately five million registered MoMo users and 840 043 monthly active users.
Last week, MTN Group CEO Ralph Mupita reported the telco’s performance for the first quarter of 2021, saying he was encouraged by the growth of MoMo services in SA.
“MTN SA also progressed work on MoMo partnerships to accelerate the growth of the business. The platform continues to grow transactions driven by innovative and relevant solutions.”