MTN Mobile Money Uganda Limited has announced that the company has paid UGX 19.7 billion to mobile money customers for the past three quarters since the fintech company started paying interest on customers’ mobile money account balances in September last year.
Mr. Richard Yego, the Managing Director at MTN Mobile Money Uganda Limited revealed the company paid UGX5.7 billion to 19.9 million customers in the second quarter, UGX5.56 billion to 19.7million customers in the third quarter, and UGX8.5 billion to 20.5million customers in the fourth quarter of 2022.
“We are pleased to announce that our interest payout to our customers especially in the fourth quarter is on the upward trend owing to the diversification of our investments,” said Yego. “The MTN Mobile Money Uganda Limited Board of Trustees invested in call deposit and average balances held by trust bank on a daily basis.”
“We hope that this pay-out will enhance financial inclusion, leading to substantial development and social well-being of the citizens as the country strives to achieve Vision 2040,” he added.
Yego noted that the company hopes to record a five percent increase in the interest payout to customers for the next quarter driven by an increase in interest rates and treasury bill rates. He, however, said that average interest payout to customers remains low because the bulk of interest is taken by financial institutions and merchants owed to the fact that they hold high average balances in their wallets
“Customers need to have more savings on their mobile money platform in return for better interest,” he said.
The interest payout to customers is calculated based on each customer’s daily average mobile money balance for three months and customers are notified through SMS alerts once the interest has been paid.
It should however be noted that the interest payout is subject to withholding tax and standard withdrawal charges whereas cash balances in mobile money accounts that have not registered a transaction for fifteen (15) consecutive months are transferred to the Bank of Uganda at the end of every quarter of every year.
MTN Mobile Money Uganda Limited was separated from its parent company, MTN Uganda, in May 2021 pursuant to the National Payment Systems (NPS) Act, 2020. Section 49(6) of the National Payments Systems Act (NPS) of 2020 and Regulation 14 of the National Payment System Regulations of 2021 stipulates that MTN Mobile Money Uganda pays its customers interest earned on a Trust Account.