MTN Seeks Licences to Become a Direct Lender

Africa’s biggest telecom operator is preparing to take a more direct role in lending as it pursues fintech licences that would allow it to issue loans from its own books. MTN already plays a part in the credit market through partnerships with banks and other lenders. More than a million customers access loans through its platforms every day. But the company now wants to go beyond acting as a distribution channel and become the lender itself. The plan is part of a broader effort to deepen its financial services business, which has become one of the group’s fastest-growing divisions.

Why MTN Is Looking Beyond Payments

The timing is not accidental. Across much of Africa, getting a loan remains difficult for both consumers and small businesses. Traditional banks often require paperwork, collateral and credit histories that many people simply do not have. Telecom operators, meanwhile, sit on a wealth of customer data. They know how often subscribers buy airtime, use mobile money and transact with merchants. That information can provide a clearer picture of financial behaviour than many formal credit records. MTN believes this gives it an advantage. The company estimates that only 4% to 5% of adults across Africa have access to formal credit, leaving millions outside the banking system.

Nigeria’s Financing Gap Offers an Opening

Nigeria stands out as one of the largest openings. Small businesses account for much of the country’s economic activity, yet most struggle to secure financing. Industry estimates place the funding shortfall at around $236 billion. MTN is entering the conversation from a position of scale. Its mobile money platform serves more than 70 million active users, supports over two million merchants and handled transactions worth more than $500 billion last year.

The Next Front in the Bank-Telco Rivalry

For years, telecom operators have challenged banks in payments and money transfers. Lending appears to be the next area where those lines are beginning to blur. Whether MTN gets there will depend on regulators. If the licences are approved, the company will no longer be limited to connecting customers with lenders. It will be able to provide the credit itself and take on both the rewards and risks that come with it.