Lesaka is scouting Southern Africa for acquisitions to diversify its earnings, as its local consumer business recorded its fastest growth in the quarter to December.
The fintech group, which offers a range of digital payments platforms, has over the past few years been on an acquisition trail as it transforms the business and recovers from losses. Its latest acquisition of Bank Zero for R1bn received the approval of the competition authorities but is still waiting for the nod from the Prudential Authority.
Lincoln Mali, CEO of Lesaka Southern Africa, said the African continent is the next frontier.
“We are looking at a couple of options in Southern Africa,” he said in an interview. “That’s an environment we are going to look at. We are not slowing down; there is a lot to be done.”
Mali said the group will have a “meaningful presence in the continent. We really want to diversify our earnings. We want to be able to double down on the Africa story because we think it’s a fundamental part of our future. We want businesses we can partner with or acquire to add to our solution set and geographic set and be Ebitda-accretive.”
Lesaka has a presence in Namibia, Botswana, Zambia and Kenya.
It operates three divisions — merchants, consumers and enterprises. Merchants, the biggest division, provides payment card machines and related technology services to 130,000 businesses, including small- and medium-sized entities. It reported revenues of R833m in the three months to December, up from R783m the previous quarter.
The consumer business, which includes EasyPay, offering insurance, funeral policy and loans, grew customers by 21% to 2-million and revenue of R567m from R539m.
For the three months December, the company’s second quarter of the financial year, Lesaka had the highest net new additions in the grant beneficiary market, surpassing Capitec and competitors for the first time, Mali said.
He said 19% of the active consumer base has a transactional account, loan and insurance policy, up from 14% in the same period last year.
“We have improved our distribution … our branches are like any bank branch, which gives a sense to customers that we take them seriously. We have improved production transactions; loan and insurance accounts are now very competitive. In this last quarter we have grown our new accounts faster than any other bank, including Capitec. It’s been a relentless drive on distribution and marketing.”
Mali said that given the success of insurance products, Lesaka is piloting selling insurance policies in the open market beyond its base.
“We are not here to push products — we are here to put people first. Our mission is to understand what customers truly need and deliver solutions that empower them in a digital world.
— Lincoln Mali, CEO of Lesaka Southern Africa
He said the company has about 14.3% of social grant payments, second after Capitec. Last year it said it was targeting 20% in the next three to five years.
The enterprise unit, which provides the technology platforms that enable their corporate clients to sell prepaid airtime and electricity, as well as make bill payments, recorded a 58% rise in revenue to R253.2m.
During the second quarter, Lesaka added Shoprite, enabling customers to buy airtime and data at stores, while at Investec their customers are able to do so using the app and website. At Spar, Lesaka is enabling the retailer’s customers to pay bills.
“The enterprise business is the baby of the group, and we think that they will become a material contributor in the group,” Mali said. “They came from a loss last year, and we are now at R24m adjusted ebitda. The contribution of existing business and us buying Recharger is giving us that opportunity.”
Lesaka recently unveiled a new brand identity, with the company describing it as a unified brand identity that takes the group beyond the sum of its parts.
“We are not here to push products — we are here to put people first,“ Mali said. ”Our mission is to understand what customers truly need and deliver solutions that empower them in a digital world. This is not about selling a transactional account or insurance; it’s about building trust, creating access, and shaping the future together. Everything we’ve achieved has led to this moment.”
Business Times
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