QUICK LINKS

×
  • Business - Companies
  • Updated: August 05, 2021

MTN, Airtel Cash Out Big From Airtime Loans Amid High Inflation Rate

MTN and Airtel Nigeria reported massive growth in their airtime loan businesses services this year, according to the financial reports of the GSM giants for the quarter ended June 2021.

MTN, Nigeria’s largest telecommunication company reported a massive 69.6% growth in its Fintech segment which comprises its MoMo Agency business and its Xtratime airtime credit service business.

According to the company, its FinTech segment was the fastest growing business rising 69.5% to N31.6 billion in the first half of 2021. MTN’s FinTech business includes Xtratime, its use now pay later business, and MoMo its agency business.

MTN also reported that revenue from Xtratime makes up about 95% of revenue from its FinTech segment.

Airtel reported strong numbers during the quarter with its airtime credit services revenue from Nigeria rising by a whopping 70.9% year on year. Both companies lead in the airtime credit services space as Airtel earned close to $36 million from this segment.

Nigeria’s growing youth population has become the focus for quick loan schemes with businesses exploiting the huge demand for easy credit and the temptation it provides for their customers, to boost topline revenues. Several FinTech companies led by microfinance banks have relied heavily on payday lending to drive up sales, relying mostly on the volume of customers and technology to manage defaults.

With the increasing cost of living and narrowing income level, the average Nigerian spends more than 100 percent of their income on food, increasing the debt margin for other expenses. 

For utilities like Airtel and MTN, the business model is enabled by the near guarantee that the customers will make repeat calls, thus ensuring that airtime borrowed will be subsequently repaid. Commercial banks who are traditional lenders don’t have any such hold on their customers except for expensive collaterals which often take years to repossess. But for telcos, recourse is as easy as it gets.

icon
Get the FREE app

Read the latest and trending news in Nigeria and around the World

Install

Tags

Join our Telegram platform to get news update Join Now
Oluwatosin Ogunjuyigbe
Oluwatosin Ogunjuyigbe

A seasoned business content writer, financial markets analyst, and tech enthusiast.

More From this Author

COMPANIES PROFILE

e-tranzact international plc ICT

ETranzact was launched in September 2003, since then eTranzact is presently in p...

LEARN MORE
cwg plc ICT

CWG Plc, formerly Computer Warehouse Group Plc was founded in 26 September 1991,...

LEARN MORE
courteville business solutions plc ICT

COURTEVILLE BUSINESS SOLUTIONS PLC (“Courteville”), is a foremost Ni...

LEARN MORE
mtn nigeria communications plc ICT

On May 16, 2001, MTN became the first GSM network to make a call following the g...

LEARN MORE

0 Comment(s)

SPONSORED