MTN Stuck With Shs7.4bn On Dormant Mobile Money Accounts

MTN Uganda has revealed that it is stuck with Shs7.4bn on dormant Mobile Money accounts in a period of less than two years.

The revelation was made today by Wim Vanhelleputte, the MTN Chief Executive Officer while appearing before Parliament’s Finance Committee together with officials from Airtel and Uganda Telecom Limited to provide their submissions on the National Payment Systems Bill 2019 that is before the Committee for scrutiny.

Vanhelleputte said that their January 2020 monthly report on the dormant account showed that MTN had Shs4.7bn of funds on dormant accounts that have been idle for over a year while Shs2.7Bn has lied idle on mobile money accounts for more than 90 days.

MTN Mobile Money was introduced in Uganda in 2009. It’s not clear how much money MTN has accumulated on dormant accounts since then because Vanhelleputte only gave figures for less than two years.

He added that MTN reports to Bank of Uganda through its escrow partners: Stanbic Bank, DFCU Bank, Centenary Bank, Absa Bank and Standard Chartered Bank.

He said that the National Payments Systems Bill 2019 should be able to clarify on how to treat those funds and what Telecoms should do with the funds.

The proposed bill provided for  9 months within which a mobile money account can be declared dormant, a proposal that was welcomed by MTN but called on Parliament to align the dormancy period with that of banks.

In a related development, the Chairperson of the Finance Committee, Henry Musasizi summoned a number of banks to explain the whereabouts of profits they obtain after investing money deposited by mobile money subscribers after Telecoms denied knowledge of where the money goes.

UTL’s M-Sente escrow account is in Equity Bank while Airtel has escrow accounts in; Stanbic Bank, Equity Bank, Absa Bank and Centenary bank.

During the interface, the telecoms denied knowledge of how Banks utilize money on the trust accounts with some proposing to have the interest given to Telecoms so as to educate customers on mobile money.

Vanhelleputte said that the interest gained after banks invest money on trust funds is entirely in the hands of the banks.

 “The banks are the holders of the account, what they do I don’t know. I think there are certain restrictions on what they can do with the money because they hold the money in trust for mobile money customers. We trust that they are holding that money well. We aren’t getting any direct interest on the money sitting on the escrow accounts; they have an obligation to keep it in trust,” he said.

However, MPs rejected the proposal to have the interest given to Telecoms and agreed to have the Banks explain where the profits are taken.