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Press Box

MTN Uganda and Stanbic Bank Press Conference.

Release date:3/20/2015

Q:    Why has MTN Uganda and Stanbic Bank called this press conference?
A:    MTN and Stanbic Bank wish to address the inaccurate and deliberately false story entitled ‘Inside MTN Mobile Money Saga’ published in the Independent Issue No. 359.  The story is not only misleading but is in breach of the sub-judice rule as this matter is the subject of criminal proceedings at the Anti-Corruption Division of the high court.

Q:    What is the basis of the allegations made in the article?
A:    The basis of the allegations are that MTN created fictitious money to the value of 21billion on its Mobile Money platform and transferred it to its MTN Mobile Money shops.  The article also 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.

Q:    Are these allegations true?
A:    These allegations are totally false.  Firstly, Mobile Money platforms do not generate money and therefore no fake money can be created.

Q:    On the basis of the allegations, has any MTN Mobile Money Customer lost money?
A:    No MTN Mobile Money customer has lost any money. It is a regulatory requirement that MTN Uganda automatically tops any shortfall between the Escrow Account held by the bank and the transaction value on the Mobile Money platform.  Bank regulations are very strict on the reconciliation of the escrow and the Mobile Money platform account.

Q:    How does the Mobile Money Platform operate?
A:    All Mobile Money platforms generate ‘electronic value’ that directly corresponds to the value of legal tender deposits.  If a customer pays 10,000/=, this amount is received by the agent and an electronic equivalent is reflectively generated when this money is deposited in an escrow account. The system then credits his Mobile Money account with 10,000/=.  The total sums of money deposited on the escrow account must always correspond to the total sums on the Mobile Money platform.

Q:    How many customers are currently on the MTN Mobile Money service?
A:    MTN has over 7 million customers on its Mobile Money service.  Over and above the uptake and usage of the service, through MTN Mobile Money, we have been able to directly create 39,000 new Ugandan businesses through our agent network and this in turn has generated employment for over 160,000 people.

Q:    How does the Bank of Uganda regulate Mobile Money?
A:    The regulation of Mobile Money in Uganda is currently done through mandatory partnerships with banks that are regulated by the Bank of Uganda. 

Q:    Why does Mobile Money attract such intense interest worldwide?
A:    Mobile Money is a product that was developed in the region and has to a greater extent realised the much anticipated vision of financial inclusion of the unbanked.  This product is universally accepted as being revolutionary in its conceptualisation and actualisation.  Mobile Money has become a global product used in all the 22 countries in which MTN operates.

As the fastest growing product in Uganda growing at an average of 39%, Mobile Money generates a lot of public interest both locally and internationally. Mobile Money is bringing more business and people into the formal economy and has been transformative in easing financial and merchant transactions and utility payments.  To date more than 85% of the mobile bill payment collections in Uganda are made through the MTN Mobile Money platform.  To this end, the utility companies have noted a marked increase in punctual bill payments due to the expediency of Mobile Money.