Lincoln Mali, CEO of Lesaka Southern Africa.
JSE-listed fintech group Lesaka Technologies disbursed loans amounting to over R1 billion to its customers, the majority of whom are South African Social Security Agency (SASSA) grant beneficiaries.
This is according to Lincoln Mali, CEO of Lesaka Southern Africa, speaking today in an interview with ITWeb after the company announced its financial results for second quarter of 2026.
National Treasury oversees South Africa’s social grant system via the Department of Social Development and SASSA, with funding projected to rise to about R259.8 billion by 2026/27.
Lesaka plays an indirect role in SA’s social grant system through its EasyPay platform, which provides banking and financial services to grant recipients.
While it no longer distributes grants on behalf of government, the firm enables beneficiaries to receive, manage and spend their grant income via transactional accounts, cards and digital payment services.
It also offers credit and other financial products to this customer base, positioning itself as an alternative to traditional banks and Postbank.
At group level, Lesaka’s net revenue rose 16% to R1.6 billion; group adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) increased 47% to R304 million; and adjusted earnings climbed to R111 million from R17 million.
However, from a segment point of view, the firm’s second quarter results reflect a mixed performance.
The consumer segment, which caters for the SASSA business, delivered robust growth, with revenue up 38% to R566.7 million, with segment adjusted EBITDA surging 106% to R159.4 million.
According to Mali, Lesaka’s consumer business was the standout performer during the reporting period.
“We have seen huge growth in customer numbers, cross-sell, as well as average revenue per user. We have also seen our market share grow from 11% to 14.3%,” he said.
“With the SASSA business, we are now the second-biggest grant business after Capitec. Our market share is now 14.3%; and in the last quarter, we had the most net additions of new customers. Our lending business has also grown a lot. We were able to disburse over R1 billion in loans in this quarter.”
Mali explained that the shift came after Lesaka increased the loan size from R2 000 to R4 000 and extended the terms from six to nine months.
“Now, 40% of the new loans are coming from the mid-term loans, which shows the maturity of our customers in that base.”
He added that from a risk perspective, the loan book remains well-managed, with a credit-loss ratio of below 6% per annum.
“Interestingly, 78% of the customers that are getting loans are repeat borrowers and 80% of them are clients that have been with us for over two years, which means we know more about these customers and we can predict their affordability and payments, which augurs well for risk management.
“If you think about this business four years ago, it would have been loss-making; it would have been burning cash; and now it is doing very well.”
The enterprise segment also performed strongly, with revenue rising 58% to R253.2 million, net revenue increasing 67% to R216.9 million, and segment adjusted EBITDA improving to R24.3 million from a loss previously.
Mali said the enterprise business is now becoming an important revenue contributor for Lesaka.
“The Recharger business that we bought is starting to contribute EBITDA for us, indicating that our acquisitions are accretive.”
Lesaka signed a definitive agreement to acquire 100% of the issued and outstanding ordinary shares of prepaid electricity vendor Recharger for R507 million in November 2024.
On the flip side, the merchant division’s revenue declined 13% to R2.26 billion, while net revenue edged down 2% to R833.3 million and segment adjusted EBITDA fell 6% to R170.3 million.
“That business is going through massive changes by pulling together four businesses that were separate before – Adumo, Gaap, Connect and Kazang – into one. That business is in the midst of a significant transition,” Mali said.
“We have also recruited two dynamic business leaders for that business – Kagiso Khaole, who recently came from Starlink, and Roland Naidoo, who came from MultiChoice. Under that leadership, we are changing the structures and aligning the teams. We are also streamlining costs and infrastructure in that environment.
“That entire programme is likely to run until the end of the year, so we expect flat year-on-year growth from that business between now and the year-end. It’s the same playbook that we used on our consumer business.”
Lesaka chairman Ali Mazanderani says: “I am delighted that for the first time since the creation of Lesaka in 2022, we have delivered a positive net income and have met our guidance for the 14th consecutive quarter.
“We also reaffirm our full-year guidance for FY2026, which will represent a 49% growth in group adjusted EBITDA at the mid-point, and positive net income attributable to Lesaka.”
