MTN Nigeria Sells Majority Stake in MoMo PSB and Y’ello Digital for N95.5bn 

MTN Nigeria has announced plans to transfer a 60 per cent stake in both MoMo Payment Service Bank Limited and Y’ello Digital Financial Services Limited to its South African parent company, MTN Group, through a restructuring transaction valued at N95.5 billion. Shareholders of MTN Nigeria Communications Plc will vote on the deal at the company’s Annual General Meeting on April 30.

The transaction ends MTN Nigeria’s solo ownership of two fintech businesses that have consumed significant capital while remaining loss-making, and it signals a deliberate pivot toward shoring up the core telecommunications business that generates the group’s primary revenue.

What MoMo PSB and Y’ello Digital Actually Do

Understanding what MTN Nigeria is restructuring requires understanding what these two entities are. MoMo is a payment service bank business that provides financial services, including deposits, payments, transfers and digital wallets to individuals and small businesses in Nigeria via digital and mobile-based platforms.

Y’ello Digital is a licensed super-agent that provides agency banking and financial services, including cash deposits, withdrawals and bill payments. Y’ello Digital operates through the MoMo network. Together, they form the infrastructure through which MTN Nigeria pursues financial inclusion for millions of Nigerians who remain outside the formal banking system. 

Both businesses operate at the frontier of Nigeria’s fast-growing but intensely competitive mobile money market, where they face pressure from bank-led fintech products, standalone digital lenders, and the Central Bank of Nigeria’s expanding payment service bank framework.

How the Deal Is Structured

MTN Nigeria said the transaction will cost N95.5 billion and reduce its exposure to the loss-making financial technology companies. The deal unfolds in two distinct phases. 

Under the first phase, MTN Group Fintech will acquire 60 per cent equity in both fintech companies through a mix of newly issued shares and the purchase of existing shares in MoMo from MTN Nigeria. The deal is based on an agreed valuation of N95.5 billion on a debt-free, cash-free basis, implying a capital injection of about N152.06 billion into the businesses. MTN Nigeria will retain the remaining 40 per cent stake.

Why MTN Nigeria Needs to Make This Move Now

After bankrolling its fintech unit on its own, MTN Nigeria now needs outside capital to scale payments, remittances, and agent networks, making the separation a necessary step to unlock that next phase of growth. 

The financial logic is straightforward. Fintech businesses at the growth stage consume capital before they generate it. MTN Nigeria has been the sole funder of that growth phase, and the cost has shown up in its consolidated financials. The fintech subsidiaries are currently loss-making, and those losses will no longer be consolidated into MTN Nigeria’s financial results following the separation. This is expected to improve headline performance metrics, including EBITDA margins and free cash flow.

MTN Nigeria will no longer need to commit as much funding to support the fintech subsidiaries, allowing it to further strengthen its balance sheet and allocate capital to drive growth in its core connectivity platform. As a result, the company’s ability to pay dividends is expected to improve or, at the very least, remain stable

The Regulatory Simplification That Comes With It

Beyond the financial engineering, the restructuring solves a regulatory complexity that has grown increasingly awkward as Nigeria’s sector-specific regulation has tightened. MTN Nigeria will remain under the supervision of the Nigerian Communications Commission. The fintech entities will operate under banking regulations, reducing compliance overlap and aligning each business with its respective regulator.

Running a telecoms company and a licensed payment service bank inside the same corporate entity creates dual regulatory obligations with different masters. The Nigerian Communications Commission governs telecommunications; the Central Bank of Nigeria governs payment service banks. Separating the businesses into distinct regulated entities that answer to the correct regulator removes that overlap and makes compliance cleaner for both the business and its regulators.

Both parties will consolidate their interests under a new Central Bank of Nigeria-regulated holding company, formalising a shared ownership model.

What Happens If Shareholders Approve the Deal

If approved, the transaction will proceed through regulatory and legal processes, with completion targeted by the end of 2026. That timeline means the regulatory clearances from the CBN, the NCC, and potentially the Securities and Exchange Commission must all move in sequence over the remaining months of the year.

Frequently Asked Questions

What is MTN Nigeria selling in this transaction? MTN Nigeria plans to sell a 60 per cent stake in both MoMo Payment Service Bank Limited and Y’ello Digital Financial Services Limited to MTN Group Fintech, a subsidiary of its South African parent company MTN Group. MTN Nigeria retains the remaining 40 per cent stake in both entities.

How much is the deal worth? The transaction values the two fintech businesses at N95.5 billion on a debt-free, cash-free basis. The deal implies a total capital injection of approximately N152.06 billion into the fintech businesses.

Why is MTN Nigeria selling the majority stake in its fintech subsidiaries? MTN Nigeria describes both MoMo PSB and Y’ello Digital as currently loss-making. By transferring majority ownership to the parent group, MTN Nigeria reduces its exposure to fintech losses, improves its consolidated financial metrics, frees up capital for its core telecoms business, and brings in a stronger funding partner to scale the fintech operations.