Richard Yego (L) signs the dummy cheque of the total sum of money to be paid out as interest to the active MoMo customers
The benefits of separation of Mobile Money from the telecommunication business are beginning to be noticed as MTN Mobile Money customers are scheduled to receive UGX 5.7 billion interest pay-out for the quarter ended June 30, 2022.
MTN Mobile Money Uganda Limited was separated from its parent company, MTN Uganda, in May last year 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.
The payout follows approval by its Board of Trustees and Bank of Uganda to pay out interest to 19.8 million MoMo users who had a minimum of UGX 1 and above between 1st April and 30th June. The payments will be disbursed starting Wednesday 14th September 2022.
Mr. Richard Yego, the managing director at MTN Mobile Money Uganda 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.”
Mr. Yego said 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.
He stated that customers could now save and invest with Xeno Investments via the mobile money platform and encouraged customers to utilize the various advance products including Momo advance, Mokash and Mosente to better their lives and those of their loved ones.
Speaking during the pay-out announcement, Mr. James Mugabi the Chairman Board of Trustees for MTN Mobile Money Uganda Limited congratulated MTN MoMo for the milestones registered since it started operations more than a decade ago and especially for contributing immensely to financial inclusion and deepening 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 said the pay-out will also 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.