Mobile Telecommunication Company MTN’s subsidiary, MoMo Uganda, a mobile money platform has scheduled to pay its Ugandan customers UGX 5.7 million ($1,496.95) for the second quarter (April to June) of 2022.
Following the enactment of the National Payment Systems (NPS) Act, 2020, MTN Uganda’s telco and fintech business was separated leading to the creation and licensing of MTN Mobile Money Uganda Limited in 2021. This has enabled the fintech company pay its customers’ interest to a trust account as stipulated by Section 49(6) of the National Payments Systems Act (NPS) of 2020 and Regulation 14 of the National Payment System regulations of 2021.
The payout which is set to be disbursed to 19.8 million users starting Wednesday, 14th September 2022 is approved by MoMo Uganda Board of Trustees and Bank of Uganda. This is only limited to customers who had a minimum of UGX 1 and above between 1st April and 30th June.
Managing director at MTN Mobile Money Uganda, Mr. Richard Yego said the interest will be calculated based on each customer’s daily average mobile money balance for three months.
“As MTN Mobile Money Uganda, we strongly believe that this quarterly interest paid to customers will encourage a culture of savings and create wealth and opportunities for investment, especially in medium and small businesses which use the mobile money platform intensively, “he said at the MTN Uganda headquarters in Kampala.
“We also hope that the pay-out will enhance financial resilience by bringing more people into the formal sector through Mobile Money and thus leading to substantial development and social well-being of the citizens as the country strives to achieve Vision 2040.”
Customers will be notified through SMS alerts once the interest has been paid. However, the interest rates paid will be subjected to withholding tax as well as standard withdrawal charges. The interest accrued on mobile money accounts that have not registered a transaction for fifteen (15) consecutive months will be transferred to the Bank of Uganda at the end of every quarter of every year.
Yego further stated that customers could now save and invest with Xeno Investments via the mobile money platform as he encouraged customers to utilize the various advance products including Momo advance, Mokash and Mosente to better their lives and those of their loved ones.
Chairman Board of Trustees for MTN Mobile Money Uganda Limited, Mr. James Mugabi congratulated MTN MoMo for the milestones registered since it started operations more than a decade ago and contributing to financial inclusion among the unbanked population.
“I am glad that the MTN MoMo has stirred the demand for various financial services and products by people who are in the lower pyramid, and thus improving their livelihoods,” he said.
“Now the interest payout on their Momo balances makes the service even more important to the population in terms of savings which is the only option to growing wealth.”
He also added that the pay-out will build consumer confidence in the payment ecosystem and expand a set of mobile e-commerce capabilities to businesses and consumers as the economy becomes cashless.