MTN MoMo interest payout reaches Shs20.7bn in less than a year

KAMPALA, UGANDA: MTN Mobile Money Uganda Ltd has paid Shs20.7bn to the customers for the past three quarters since the company started paying interest on customers’ mobile money account balances in September last year in fulfilment of the newly enacted National Payment Systems (NPS) Act, 2020.

Richard Yego, the Managing Director at MTN Mobile Money Uganda Ltd said the company paid Shs 5.7bn to 19.9 million customers in the second quarter, Shs6.5bn to 19.7million customers in the third quarter and Shs 8.5bn 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. The MTN Mobile Money Uganda Ltd Board of Trustees invested in call deposit and average balances held by trust bank on daily basis,” he said.

“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.”

Yego said MTN MoMo Uganda Ltd hopes to record a five per cent increase in the interest payout to customers for the next quarter driven by an increase in interest rates and treasury bill rates.

He, however, noted 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. Customers are usually notified through SMS alerts once the interest has been paid.

However, the interest payout is subject to withholding tax and standard withdrawal charges whereas cash balances in mobile money accounts that have not registered any transaction for 15 executive months are transferred to the Bank of Uganda.