Mastercard has agreed to purchase a minority stake in the fintech division of Africa’s largest mobile phone provider, MTN Group.

The stake purchase in the $5.2bn company is expected to occur very soon, with the investment closing subject to usual closing conditions, MTN has said in a statement.

According to MTN Group’s president and chief executive officer, Ralph Mupita, the deal will be structured as a commercial partnership on payments and remittances employing Mastercard’s technical infrastructure to develop throughout Africa and an investment in a minority share.

The investment comes a year after MTN Group said it was searching for minority investors in its African fintech subsidiary after separating it from the carrier’s telecom business, in an effort to maximize development in the thriving division.

MTN was also able to obtain a mobile banking license in Nigeria, its largest market, allowing the company to offer financial services to millions of new clients.

The company has recorded a transactions increase of 37% to $8.3bn, with over 60 million active users executing them. By the end of June 2023, the MTN Group had over 290 million subscribers.

Mupita said: “We delivered a resilient performance in H1 23 and made good strategic progress against a tough macro backdrop. In South Africa, we were very encouraged by the improved network availability on the back of our power-resilience investment, resulting in a stronger Q2 2023 performance than Q1 2023.

“In Nigeria, we delivered a very strong operational result, having navigated the cash shortages in Q1 2023 and increased inflation. The policy changes implemented in Nigeria in Q2 2023 have short-term negative impacts, but we see these as being very constructive for the investment climate in the medium to longer term.”

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