How FCCPC’s airtime lending crackdown wiped out nearly three-quarters of MTN Nigeria’s fintech revenue
MTN Nigeria’s impressive half-year financial performance has exposed an unexpected casualty of regulatory intervention on its fintech business.
MTN Nigeria’s impressive half-year financial performance has exposed an unexpected casualty of regulatory intervention on its fintech business.
While the country’s largest telecommunications operator reported a 70.6 percent jump in profit after tax and declared a record interim dividend of N26 per share, its second-quarter earnings also revealed how the suspension of its XtraTime airtime lending service triggered one of the sharpest quarterly declines in fintech revenue in the company’s recent history.
The figures show that fintech revenue plunged by 72.4 percent in the second quarter, falling from N47.1 billion in the first quarter to just N13 billion, after MTN suspended XtraTime in April following new regulations introduced by the Federal Competition and Consumer Protection Commission (FCCPC).
The development highlights how regulatory actions can significantly reshape the revenue streams of Nigeria’s telecom operators, particularly as they increasingly diversify into financial services.
Although MTN’s overall service revenue rose 25.9 percent to N3 trillion in the first half of 2026, most of that growth came from its core voice and data businesses following the 50 percent tariff adjustment approved by the Nigerian Communications Commission (NCC) last year. Beneath the headline numbers, the fintech division suffered a severe setback.
The disruption began on April 16 when MTN suspended XtraTime, its popular airtime advance service that allows subscribers to borrow airtime or data and repay during their next recharge. The suspension followed the FCCPC’s 2025 Digital Money Lending Regulations, which classified airtime lending alongside digital lending services and required operators to obtain regulatory approvals before offering such products.
Although MTN initially assured investors that the suspension would not materially affect its operations, the second-quarter results painted a different picture.
Without fresh lending, revenue from the service collapsed almost overnight. Even more damaging, the company was left carrying outstanding loans that customers had yet to repay.
As a result, expected credit losses on trade receivables jumped more than fivefold, increasing from N2.98 billion in the first quarter to N15.97 billion in the second quarter. MTN also wrote off an additional N3.2 billion relating to historical reconciliation variances from legacy systems, further weighing on earnings.
The figures demonstrate that airtime lending had become a significant contributor to MTN’s fintech business, despite often receiving less public attention than its rapidly growing mobile money operations.
Ironically, MTN’s mobile money business continued to perform strongly during the same period. Revenue from MoMo services more than doubled, growing by about 132 percent year-on-year, while active wallets increased by 1.3 million to five million users.
However, the strong performance of mobile money was not enough to compensate for the collapse in XtraTime revenue, illustrating the growing importance of airtime lending within MTN’s broader fintech strategy.
The setback also raises broader questions about Nigeria’s rapidly evolving digital financial services landscape.
Over the past five years, telecom operators have increasingly transformed from providers of voice and data services into financial technology companies, offering mobile wallets, payment services, insurance, lending and merchant solutions. Airtime lending became one of the easiest entry points for millions of Nigerians who lacked access to traditional banking or formal credit.
Industry analysts note that for many low-income users, airtime advances often serve as emergency microcredit, helping subscribers remain connected even when they temporarily run out of cash. That widespread adoption also made the service an important source of recurring revenue for telecom operators.
The regulatory uncertainty surrounding XtraTime remains unresolved.
Although MTN’s technology partner, Optasia, resumed the service on June 24 and customer notifications were sent in July, the legal environment remains uncertain.
Just days before MTN released its half-year results, the Federal High Court in Lagos dismissed an industry challenge against the FCCPC regulations and allowed the commission to continue enforcing the rules. While the court also ruled that the FCCPC does not have licensing authority over telecommunications operators, the decision effectively preserved the regulatory framework governing digital lending. Industry players have since filed an appeal while seeking to halt enforcement pending the outcome.
For MTN, the timing could hardly have been worse.
The company had already begun experiencing slower growth in its traditional telecom business. Service revenue growth, which reached 41.8 percent in the first quarter following tariff increases, slowed sharply to 13.2 percent in the second quarter as the impact of higher tariffs began to fade.
That means the operator simultaneously faced slowing growth in its core telecom business and a sharp regulatory shock to one of its fastest-growing non-telecom revenue streams.
Despite these challenges, MTN completed one of the most remarkable financial recoveries in Nigeria’s corporate sector.
Only 18 months ago, the company had negative shareholders’ equity after massive foreign exchange losses caused by the naira’s depreciation. Today, shareholders’ equity has recovered to N930.6 billion, retained earnings have climbed to N793.1 billion, and all foreign currency debt has been eliminated.
Yet the fintech setback serves as a reminder that Nigeria’s telecom industry’s future growth will increasingly depend not only on subscriber expansion and higher tariffs, but also on regulatory certainty.
As operators invest billions of naira to build digital financial ecosystems, the XtraTime episode underscores how quickly policy changes can alter business performance. For MTN, rebuilding its fintech momentum will require more than restoring airtime lending, it will depend on navigating a more complex regulatory environment while convincing investors that fintech can once again become a reliable engine of growth alongside voice, data and mobile money.
