BankTech, the digital lending arm of MTN's Mobile Money unit, has reported a record-breaking $592 million in loan disbursements for the first quarter of 2025. This figure, revealed in MTN Group’s latest financial results, represents the platform's highest lending volume since its inception in August 2023. The significant surge underscores the escalating demand for microloans across Africa and the increasingly pivotal role that telecommunications companies are playing in bridging the continent's substantial credit gap.
BankTech represents MTN's strategic foray into the banking-as-a-service (BaaS) sector. The platform offers a suite of APIs that empower fintech startups, established businesses, and various digital platforms to seamlessly integrate a range of financial services, including lending, savings, and insurance, directly into their existing ecosystems. The loans facilitated by BankTech are predominantly targeted towards individual consumers and small businesses, leveraging MTN’s extensive network and user base.
The rapid growth of BankTech highlights a broader trend: the expanding influence of telecommunications operators in fostering financial inclusion across Africa. Prior to MTN's entry into the digital lending arena, pioneering platforms such as Safaricom’s M-Shwari (launched in 2012), KCB M-Pesa (a partnership with Kenya Commercial Bank), Airtel Money Loans across East Africa, and Vodacom’s M-Pesa in South Africa had already established the viability and demand for mobile-based consumer lending. Collectively, these telco-led platforms constitute a consumer lending marketplace valued at approximately $247 million, all striving to address Africa’s estimated $782 billion credit deficit as of 2024.
BankTech's impressive growth trajectory reflects a notable shift in consumer confidence, indicating a growing acceptance of telecom-driven financial solutions as credible and accessible alternatives to traditional banking institutions. The platform's momentum has been building steadily since 2024, with loan disbursements reaching $371.7 million in the first quarter, followed by $359.9 million in the second quarter, $461.5 million in the third quarter, and $546.8 million in the fourth quarter. This consistent upward trend culminated in the record $731.6 million in loans disbursed in the first quarter of 2025.
According to MTN’s financial reports, this significant surge in lending activity was primarily fueled by robust performance in key markets such as Ghana, Uganda, and Cameroon. These are regions where MTN's fintech services are experiencing rapid adoption and where digital lending is becoming increasingly entrenched in the financial landscape.
However, despite boasting the largest subscriber base within the MTN Group, Nigeria has yet to meaningfully participate in this lending surge due to prevailing regulatory constraints. MTN Nigeria currently operates under a Payment Service Bank (PSB) license, which restricts its activities to providing basic financial services such as accepting deposits, facilitating transfers, and offering mobile wallets. Critically, the Central Bank of Nigeria (CBN) prohibits PSBs from offering credit products, effectively putting MTN’s ambitious lending plans for the Nigerian market on hold.
This regulatory barrier means that MTN’s BankTech platform is currently unable to operate its lending business within Nigeria, even as the demand for credit among its substantial user base continues to rise. Instead, the company relies on Xtratime, an airtime advance service that allows subscribers to borrow airtime and repay it upon their next recharge. While not classified as a traditional cash loan, Xtratime serves a similar function for low-income and unbanked users who require short-term value.
Despite the regulatory limitations, Xtratime has emerged as a crucial driver of MTN Nigeria’s fintech revenues. In the first quarter of 2025, MTN Nigeria reported an impressive 57.9% year-on-year increase in fintech revenue, reaching ₦36.1 billion. This growth was largely attributed to the continued expansion of airtime lending facilitated by Xtratime.
This growth was further bolstered by a strategic revamp of MTN’s customer acquisition strategy, initiated in the third quarter of 2024. The company optimized its incentive structures, strengthened distribution oversight, and focused on attracting high-value users, leading to deeper service penetration and improved customer retention. As of the first quarter of 2025, MTN Nigeria’s subscriber base had grown by 8.2% to 84.1 million, adding 3.2 million new users – many of whom represent a significant potential market for Xtratime.
One potential avenue for MTN to expand its fintech service offerings in Nigeria would be to spin off its fintech unit and operate it as an independent fintech company. However, progress on this front has been slow.
MTN Group CEO Ralph Mupita recently acknowledged that this process is proving to be “more complex than expected,” largely due to Nigeria’s intricate and multi-layered regulatory environment. Various agencies, including the CBN, the Federal Competition and Consumer Protection Commission (FCCPC), and others, maintain stringent scrutiny over lending practices and data-driven financial services, thereby delaying MTN’s ability to scale its BankTech operations within Nigeria.
While MTN continues its advocacy efforts for broader financial service permissions under its existing PSB license, its immediate focus remains on scaling its successful BankTech platform in more liberal fintech markets such as Ghana, Uganda, and Cameroon, where it is already playing a transformative role in reshaping access to credit and fostering greater financial inclusion. The contrasting experiences in these markets versus Nigeria highlight the significant impact that regulatory frameworks can have on the ability of telco-led initiatives to address the continent's pressing credit needs.