(13th- 19th March, 2015; issue no. 359)
MTN Uganda wishes to address the inaccurate and deliberately false story entitled “Inside MTN Mobile Money Saga” published in “The Independent” Magazine of 13th-19th March, 2015- issue 359. This story is not only misleading, but is also a breach of the sub judice rule as this matter is the subject of criminal proceedings in the case of Uganda vs. Richard Mwami and others at the Anti-Corruption Division of the High Court.
The article alleges that MTN created fictitious money to the value of 21 billion on its Mobile Money platform, and transferred it to its MTN Mobile Money shops. The publication further alleges that MTN created an entity called MTN Corporate Liquidity Fund as a super-agent for transactions which were a form of illegal overdrawing of its e-accounts.
We wish to clarify that Mobile money platforms do not generate money and to that extent no fake money can be created. All Mobile money platforms generate “electronic value” that corresponds to the value of a customer’s deposit with an Operator’ agent. For instance if a customer deposits physical cash of 10,000/= this amount is collected by the agent and deposited in the Bank on an escrow account. The system then credits his mobile money account with 10,000/= The total sums of money deposited in the escrow account must always correspond to the total sums of money on the Mobile money platform The electronic value created is similar to prepaid airtime and prepaid electricity or water units to mention but a few.
The fraud that is the subject of the above prosecution occurred in 2011. No MTN Mobile Money customer lost money as MTN Uganda automatically tops up any shortfall between the Escrow account held by the Bank and the transaction value on the Mobile Money platform. Bank regulations require that if there is any short fall, the Operator has to use its own funds to immediately top up, on reconciliation of the escrow account held by the bank.
MTN Mobile Money which was launched in March 2009 and currently has 7 million users with over 3.2 million active users. MTN Mobile Money has directly created 39,000 new businesses operated by Ugandans (the Agent network), employing over 160,000 people. To date, more than 85% of the mobile bill payment collections in Uganda are made through the MTN Mobile Money platform which has led to a significant increase in financial inclusion of the unbanked public.
It remains the fastest growing product in Uganda growing at an average of 39% bringing more businesses and people into the formal economy. The service has been transformative in easing commerce, money transfers, utility bill payments and merchant transactions.
Mobile Money has become a global product used in all the 22 countries in which MTN operates and has been transformative in Africa especially in the East African region by enhancing financial inclusion and lowering the cost of doing business especially for bulk collections and distribution of cash. Its regulation is currently done through mandatory partnerships with banks that are regulated by the Bank of Uganda. It is therefore not true that the service is not regulated.
MTN Uganda is part of the MTN Group which is listed on the Johannesburg Stock Exchange (JSE) and as such it operates with an emphasis on regulatory compliance and international best practice. MTN is committed to a policy of zero tolerance for fraud and corruption.
MTN Uganda has over the years been recognized as the leading investor in Uganda, the Most Respected Company, the largest tax payer, the Employer of Choice and a recognized leader in corporate social responsibility.