KCB Group acquires minority stake in digital payment firm Pesapal

KCB Group Plc has announced that it has entered into an agreement to acquire a minority stake in Pesapal Limited, a leading Kenyan-based payment service provider licensed by the Central Bank of Kenya.

 The transaction, disclosed on October 31, 2025, marks a significant step in KCB’s strategy to strengthen its digital financial services offering and deepen its participation in the fast-growing fintech and payments ecosystem. The acquisition, which remains subject to regulatory approval from the Central Bank of Kenya, will enable KCB to collaborate with Pesapal in developing innovative payment and financial solutions tailored for small and micro enterprises across Kenya and the wider East African region.

The announcement comes at a time when KCB Group continues to demonstrate strong financial performance and resilience in a challenging economic environment. For the financial year ended December 2024, KCB reported a net profit after tax of KShs 61.8 billion, representing a 64.9 percent jump from KShs 37.5 billion in 2023.

The Group’s total revenue increased by 24 percent to KShs 204.9 billion, driven by robust growth in both interest and non-interest income. KCB’s balance sheet expanded to KShs 1.96 trillion, supported by a growing customer base and increased lending to businesses and individuals. In the first half of 2025, KCB continued its upward trajectory, posting a net profit of KShs 32.3 billion, an 8 percent increase compared to the same period in 2024.

The Group also recorded a return on equity of 22.2 percent and a cost-to-income ratio of 46 percent, underscoring its operational efficiency and profitability. This solid financial footing has provided KCB with the capacity to invest in strategic opportunities that complement its long-term vision of becoming a leading digital-first financial services provider in Africa.

Pesapal Limited, founded in 2009, has grown into one of East Africa’s most trusted digital payment platforms, offering a range of services including online payments, point-of-sale systems, and mobile money integration.

Licensed by the Central Bank of Kenya as a payment service provider, Pesapal serves thousands of merchants and institutions across Kenya, Uganda, Tanzania, and Malawi.

The company recently achieved a major regulatory milestone when the High Court of Kenya ruled that commissions earned from processing payments are exempt from Value Added Tax (VAT). This ruling not only strengthens Pesapal’s financial position by improving its margins but also sets a precedent for the fintech sector, enhancing the operating environment for digital payment providers in Kenya.

Although Pesapal’s detailed financial results are not publicly available, the company’s rapid growth, expanding transaction volumes, and increasing merchant adoption position it as a key player in the region’s digital payments landscape.

The partnership between KCB and Pesapal is expected to unlock synergies by combining KCB’s extensive banking infrastructure and regulatory expertise with Pesapal’s technological innovation and digital payments network. For KCB, the move aligns with its broader goal of expanding non-funded income sources and tapping into the booming digital economy, which continues to reshape how consumers and businesses transact.

For Pesapal, the backing of a major financial institution like KCB enhances its credibility, provides access to a wider customer base, and opens up new avenues for growth and product innovation. Together, the two companies aim to develop integrated financial solutions that support Kenya’s small and micro-enterprise sector, a vital segment of the economy that increasingly relies on digital transactions for efficiency and growth.

The proposed acquisition underscores the broader transformation of Kenya’s financial services landscape, where the lines between traditional banking and fintech are rapidly blurring. As digital adoption accelerates and regulatory clarity improves, partnerships like this one are expected to drive financial inclusion and strengthen the country’s position as a fintech hub in Africa.

While the transaction is still subject to customary conditions and regulatory approvals, it signals a strategic shift for KCB Group towards a more digitally anchored future. With strong profitability, a resilient balance sheet, and growing regional influence, KCB is well-positioned to leverage this investment to create value for shareholders and customers alike. For Pesapal, aligning with KCB represents both validation and opportunity, setting the stage for its next phase of growth in the competitive and fast-evolving digital payments sector.