MTN Nigeria has proposed the merger of its two finance subsidiaries – Momo Payment Service Bank Limited and Yello Digital Financial Services Limited.
This was revealed in its proposed resolutions for its 2023 Annual General Meeting scheduled to hold in April.
The company said that the proposed merger will “hold the Payment Service Bank license granted by the Central Bank of Nigeria and will also be capable of performing super-agent services and other permissible activities”.
Momo PSB is the payments unit of MTN Nigeria Communications Plc, which began operations in 2022 on the same day that rival Airtel Africa announced a similar move by its fintech arm.
Speaking about Momo PSB, MTN Nigeria's CEO Karl Toriola said that it was aimed at supporting the Federal Government's drive towards financial inclusion in Nigeria.
“Not just for those in urban centres and markets, but also people in rural and remote areas of the country who remain excluded from the financial system,” he noted.
CBN granted MTN's Yello Digital Financial Services Limited a full Super Agent Licence in 2019.
Super agents are businesses licensed by the CBN to recruit agents to provide financial services to communities on behalf of banks to increase financial inclusion.
MTN Nigeria added that the proposed merger will bring enhanced value for the company and its shareholders.
Meanwhile, MTN directors have proposed a scrip dividend plan that would give interested shareholders the option to elect and receive new ordinary shares in the company instead of receiving their dividend in cash.
The scrip dividend proposal if passed at the company's AGM, it will affect dividend declared for the financial year ending December 31, 2022 and future dividends declared by the Company commencing from 2023 financial year.
The company said that the scrip plan would beneficial as the cash, which would otherwise be paid out in dividends, will be retained for working capital and other general corporate purposes.