The Mobile Money industry marked another milestone last month when each of the about 30 million subscribers got some interest on their mobile phones. For the majority, the interest ranged between 40 and 3,000 Shillings, with some instantly reading the reason for the money deposited on their phones, while others kept wondering why MTN or Airtel would deposit such money on their accounts.
But on learning that this was a mandatory action by the national operators as per their licenses, many recipients of the money counted it worthless, compared to their incomes or the savings they make. Compounded, however, it made a significant payout for the mobile money companies with MTN Mobile Money Uganda Ltd parting with 5.7 billion Shillings while Airtel Mobile Commerce Uganda Ltd paid out 3.4 billion Shillings totaling 9.1 billion Shillings in just a quarter.
One of the suggestions gathered from the public was that if this total or between 35 and 40 billion Shillings in a year was invested in one social initiative, it would have a much bigger impact than that aggregating in into dozens of Shillings per person. In an interview with URN, the board and management of MTN Uganda agreed that this would be a better idea and that they had already thought about it as a company.
“It makes a lot of sense. It can go for example to the building of a hospital. Or we can create a SACCO for savers out of this money,” said Charles Mbiire, the Board Chairman of MTN Uganda. However, the National Payments Systems Act (NPS) of 2020 and the National Payment System regulations of 2021 provide that the interest be paid into an individual saver’s mobile wallet.
Andrew Bugembe, MTN Uganda Chief Finance Officer, who has also been acting CEO since June, said talks are ongoing between the mobile money service providers and industry regulators to see how the money can be utilized more effectively. He says it would make more economic sense, especially for the countryside where many services and opportunities are lacking.
They were speaking after handing over the management leadership of the company to Sylvia Mulinge, the new Chief Executive of MTN Uganda, replacing Wim Vanhelleputte who was named Group Chief Operations Executive in June. Prior to being appointed, Ms. Mulinge was Chief Consumer Business Officer at Safaricom PLC in Kenya and has a total of eight years in managerial positions in the telecom sector.
Mbiire said MTN is now committed to delivering the Ambition 2025 strategy of leading digital solutions for Africa’s progress.
Mulinge comes in at a time when the economy is facing some distress with very high prices of consumer and other products and services, just like is happening in most of the world. The annual headline inflation rate rose to 10 percent at the end of September 2022, from 9 percent for the 12 months to August 2022, according to the Uganda Bureau of Statistics, UBOS.
This, according to the Ministry of Finance, Planning and Economic Development, has led to a decline in disposable incomes for the majority of Ugandans, while also affecting the recovery of enterprises and the economy as a whole from the effects of the two years of the Covid 19 pandemic. The Kenyan business executive says they will make sure that their products and services respond to this situation to sustain financial inclusiveness and digital innovation, as they hope to achieve greater growth.
Mulinge however, says that while they continue to work towards meeting their regulatory requirements and their own ambitions like extending network coverage, there is still the challenge of demand. MTN currently covers more than 70 percent of the country, but she says in some areas covered, there is no demand for their services either due to lack of affordability or literacy levels, among other challenges.
On the quality of service, Chairman Mbiire appealed to the consumers to bear with the management of the company, saying that sometimes the workload overwhelms them, but that they always try to serve the 16 million customers diligently and transparently.