Lesaka targets 3-million customers by 2029

Fintech group Lesaka Technologies is targeting 3-million consumer customers by 2029 as it looks to accelerate growth through its acquisition of digital lender Bank Zero, a deal it says will transform its ability to serve consumers, merchants and enterprise clients.

The company currently serves about 2.1-million consumer customers and expects growth to come from both its existing operations and Bank Zero, with the acquisition expected to be completed before the end of this year.

Lincoln Mali, CEO of Lesaka’s Southern African operations, said the acquisition would provide the group with a modern banking platform, new revenue streams and greater flexibility to expand its product offering.

“This is really a transformative acquisition for us,” Mali said.

The deal will give Lesaka access to a banking licence and Bank Zero’s technology platform, allowing the fintech group to offer banking products directly to its customers rather than relying on third-party banking infrastructure.

Mali said Bank Zero’s deposits had grown from about R400m when the transaction was announced to around R700m, while the bank was expected to reach break-even by December.

“It will give us more options for our clients. Our consumers will have a banking option, our merchants will have a banking option and our enterprises will have a banking option,” he said.

The acquisition would also allow Lesaka to generate income from customer deposits and use those deposits to support its lending activities.

“Today we borrow money from banks in order to lend to our consumers and merchants. When we have Bank Zero, we will be able to fund those lending books from bank deposits, which will be a huge relief on our balance sheet and bring our cost of borrowing down.”

Lesaka’s chief strategy officer and mergers and acquisitions lead, Steve Posner, said the transaction would give the company capabilities that would take much longer to develop organically.

“Lesaka is a fintech, and we intend to remain true to this domain,” Posner said. “We acquired Bank Zero because a banking licence is a key enabler to our fintech strategy and our core activities.”

The company also plans to expand into services such as foreign exchange and cross-border payments once the acquisition is completed.

Beyond Bank Zero, Lesaka is continuing to gain ground in South Africa’s social grant market, where it has increased its market share to 14.9%, making it the country’s second-largest player behind Capitec.

The gains have come as the overall grant market has shrunk following South African Social Security Agency (Sassa) reviews of beneficiary records.

“We have moved from 10.8% two years ago. We are now sitting close to 15%. We are 14.9%,” Mali said. “We are after Capitec, the biggest in that space, and we are growing faster than all the players.”

According to Mali, Lesaka has continued winning customers despite the contraction in the grant-recipient base.

“Sassa did a review of every grant, and it’s still going to do that,” he said. “Which means that the grant market has not grown, but we’ve grown in that market while the market has gone backwards. That shows you the value of our value proposition and our distribution.”

The group has built a broad consumer offering for grant recipients that includes payments, lending and insurance products delivered through a combination of digital services and physical distribution points across the country.

Mali said customer growth was increasingly coming from competitors across the financial services sector rather than from the state-owned Postbank.

“We are no longer just taking market share only from the Postbank. Customers are coming to us from other financial institutions as well,” he said.

Lesaka’s ambitions extend beyond South Africa. Mali said the company was evaluating acquisition and partnership opportunities elsewhere on the continent as it seeks new avenues for growth.

“We’ve grown a lot in South Africa but are thinking that there are opportunities to grow on the continent as well,” he said. “We will be looking at both the merchant business and the consumer business. In some places we will partner. In some places we will acquire.”

The expansion strategy comes after Lesaka reported a record financial performance for the 2026 financial year, with strong growth from its consumer and enterprise divisions helping the company achieve positive net income for the first time since the current group was formed.

Business Times