Africa’s largest telecoms operator is exploring banking licences in selected markets as it seeks to deepen lending through MoMo and tap a sub-Saharan African SME financing gap estimated at $331bn. The strategic test is whether MTN can turn its payments data and distribution scale into a profitable lending franchise without importing excessive banking risk onto its balance sheet.
MTN Group is considering banking licences in selected African markets as rapid growth in lending through its MoMo platform opens a potentially larger role in financing underserved businesses.
The South African group facilitated $2.7bn of loans in the first half of 2026, up 78.3% year on year, after lending reached $3.5bn in 2025, up 80.4%.
That $2.7bn is not SME lending alone. MTN’s lending volumes include consumer, marketplace and merchant products. But its rapidly expanding merchant network gives the group a potential route into a sub-Saharan African MSME financing gap that IFC estimates at about $331bn.
Chief executive Ralph Mupita has said MTN is assessing markets where customer scale and mobile-money balances could justify taking deposits and financing some loans directly rather than relying predominantly on partner banks.
The significance lies not simply in distributing more credit, but in who funds the loan, captures the return and ultimately carries the loss if borrowers default.
From Payments to SME Credit
MoMo has already evolved far beyond basic money transfers.
At the end of June, MTN had 70.8mn active MoMo customers, 1.4mn agents and 2.3mn active merchants. Its fintech platforms processed 13bn transactions worth $330.5bn during the first half of 2026.
That scale combines two assets conventional banks can find expensive to build across fragmented African markets: mass distribution and transactional data.
Many small businesses lack audited accounts, conventional collateral or extensive formal credit histories. Merchants using MoMo, however, generate records of receipts, turnover patterns, payment frequency and wallet activity.
Those data can provide an additional basis for assessing borrowers traditionally underserved by banks and could lower customer-acquisition and servicing costs relative to branch-based models, although the ultimate economics will depend heavily on defaults and funding costs.
For MTN, the potential cycle is clear:
payments generate data; data improve underwriting; credit strengthens merchant engagement; repayments generate more data.
That creates the strategic bridge between MTN’s existing payments scale and Africa’s large SME financing deficit.
Why MTN Wants More of the Economics
Much of MTN’s current lending still depends on banks and other regulated financial institutions supplying capital.
MTN provides distribution, customer access and, in some products, transaction data supporting credit assessment. Partner institutions retain much of the lending spread and carry most of the credit exposure.
An appropriately licensed MTN financial subsidiary could retain a greater share of those economics.
The incentive is visible in the numbers. While facilitated loan value rose 78.3% in H1 2026, overall fintech revenue increased by a much slower 13.3% in constant currency.
The measures are not directly comparable — loan value represents credit flows while fintech revenue covers a much broader range of services — but the divergence highlights a strategic issue: rapidly expanding lending volumes do not translate proportionately into MTN revenue while much of the credit remains partner-funded.
Holding more credit exposure directly could improve monetisation.
It would also change how investors view MTN’s fintech business.
A mobile-money platform can carry the characteristics of a relatively asset-light payments operation. A lender requires capital to support its balance sheet, provisions against expected losses and liquidity to withstand stress.
The more MoMo resembles a lender, the less purely asset-light its economics become.
That could raise financial income while also complicating valuation. Investors may assign lower multiples to a more capital-intensive lending business than to a fast-growing payments platform with limited direct credit exposure.
Direct lending would also introduce defaults, provisioning, capital requirements, liquidity management and greater exposure to economic credit cycles.
MTN has therefore stressed that any move would be selective rather than a continent-wide conversion of MoMo into a bank.
Regulation May Set the Limit
Technology is unlikely to be MTN’s principal obstacle.
Regulation may be.
Mobile-money balances are not automatically conventional deposits that can simply be redeployed into loans, while permitted activities vary materially by jurisdiction and licence type.
Nigeria illustrates the constraint.
MTN already operates MoMo Payment Service Bank there. The structure can accept deposits and provide payment services, but Nigerian rules prohibit Payment Service Banks from granting loans or advances.
MTN therefore cannot simply transform its existing Nigerian PSB into an SME lender. It would require another regulatory structure or continued partnerships with licensed credit providers.
Ghana follows a different approach. The Bank of Ghana introduced a dedicated regulatory framework for digital-credit providers in 2025 and has subsequently tightened licensing, supervision and consumer-protection requirements.
The implication is important: there is no single African banking model that MTN can reproduce across the continent.
Expansion will be determined market by market by what regulators allow MTN to fund, underwrite and hold directly.
A New Competitive Frontier
MTN is not alone in pushing mobile money deeper into financial services.
Airtel Africa’s Airtel Money had more than 54mn customers by its 2026 financial year-end and continues expanding merchant payments, credit, savings and insurance.
But MTN’s latest consideration is more consequential because it raises the possibility of assuming a greater share of lending risk itself.
The emerging contest is increasingly over four assets:
customers, transaction data, funding and credit risk.
Banks retain advantages in deposits, regulatory expertise, underwriting and managing non-performing loans through economic cycles.
MTN brings something different: enormous distribution.
Its tens of millions of MoMo customers and millions of merchants give it access to consumers and small businesses that conventional banks can find expensive to acquire and service.
The likely outcome is a hybrid model. MTN may continue using bank partners in some markets, operate through dedicated digital-credit entities in others and seek broader banking or deposit-taking licences where regulation and economics justify direct exposure.
Banks could therefore remain both partners and competitors.
The SME Opportunity Carries Banking Risk
MTN has not disclosed which markets would receive new banking licences first, how much capital it could commit to direct lending or how large a credit portfolio it would ultimately be prepared to carry.
Those are now the figures investors should watch.
So are default rates, funding costs, provisions, capital consumption and returns on lending capital.
For African SMEs, deeper MTN participation could widen access to working capital by converting digital transaction histories into usable credit information.
For MTN, the potential economics extend well beyond additional mobile-money transaction fees. A successful lending operation could allow it to capture more value from an ecosystem already serving tens of millions of customers and millions of merchants.
For banks, it could create a competitor with distribution few institutions can match.
For MTN shareholders, however, the opportunity comes with a more demanding test.
MTN has already proved that it can distribute African credit at scale. Its next challenge is whether it can use that infrastructure to address a meaningful part of Africa’s SME financing deficit while maintaining the underwriting discipline and capital efficiency investors would expect from a bank.
The decisive number will therefore no longer be only how many billions of dollars of loans move through MoMo.
It will be how much of Africa’s SME credit gap MTN can address profitably — and whose balance sheet ultimately carries the risk.
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