Ascent Capital buys stake in Ugandan-based MTN agency

Ascent Capital has acquired stake in a Kampala-based mobile money agent, making it the fund’s second deal.

The private equity fund also operating in Kenya and Ethiopia, has invested an unspecified amount in Chims Africa Ltd, which operates a chain of 130 MTN mobile money agencies in Uganda.

Chims Africa will use the funds to open an additional 700 mobile cash kiosks in the landlocked country, especially in rural areas.

“This investment will allow Chims to ensure availability of its service to customers at all times in this rapidly evolving market,” said Richard Mugera, Ascent Capital country director for Uganda.

Uganda scores 35 per cent to rank third globally in terms of share of adults holding a mobile money account after Kenya (58 per cent) and Somalia (37 per cent), according to World Bank’s Global Findex.

READ: Ascent Capital makes first investment in Ethiopian firm

There were 18.8 million registered mobile money users in Uganda as at December 2014.

Ascent is banking on the growing uptake of mobile money services in the country to make returns.

Uganda’s volume of mobile cash has more than doubled in the past two years to hit Sh695 billion (USh24.05 trillion) in 2014 from Sh337 billion (USh11.6 trillion) in 2012, according to statistics from the Bank of Uganda.

Chims is a family-owned MTN Mobile Money franchise established by Norman and Fiona Mutekanga in 2005. It currently has more than 190 employees and serves about seven million customers annually.

Ascent in February invested Sh250 million ($2.5million) in Medpharm Holdings Africa, a medical diagnostic laboratory with operations in Ethiopia and plans to expand within the greater East African region.