Strategic Alliance to Reshape SME Financing

NAIROBI, Kenya – KCB Group PLC has officially confirmed its agreement to acquire a minority stake in Pesapal Limited, a prominent East African payment service provider, in a landmark deal announced on Tuesday, November 4, 2025, EAT. The move, which is pending regulatory approvals from the Central Bank of Kenya (CBK) and other authorities, marks KCB's second major fintech investment in 2025 and underscores its aggressive strategy to dominate the digital finance and SME sectors in the region.

The precise size and value of the minority stake have not been publicly disclosed. DETAILS UNCONFIRMED. However, the partnership is set to integrate KCB's extensive financial infrastructure with Pesapal's robust payment gateway technology, which serves thousands of merchants across multiple sectors including retail, hospitality, and travel.

In a statement released around October 31, 2025, KCB Group CEO Paul Russo emphasized that the investment is designed to empower SMEs with more efficient and secure payment solutions. "By integrating payments, financing, and business tools, we want to empower SMEs to operate more efficiently, expand their markets, and participate fully in Africa’s digital economy," Russo stated. Pesapal's founder and CEO, Agosta Liko, echoed this sentiment, noting the collaboration will "set the stage for innovations that enhance value for businesses across Africa."

A Calculated Push into Digital Payments

This acquisition is a critical component of KCB's broader digital-first strategy. It follows the bank's acquisition of a 75% majority stake in Riverbank Solutions Limited, another Kenyan fintech firm, in March 2025. While Riverbank provides core backend infrastructure for services like agency banking, the Pesapal deal gives KCB direct access to a vast merchant-facing network. This two-pronged approach allows KCB to build a comprehensive financial ecosystem, controlling both the foundational infrastructure and the customer-facing payment points.

Pesapal, founded by Agosta Liko in 2009, is a key player in the East African payments scene, with operations in Kenya, Uganda, Tanzania, Rwanda, Malawi, and Zambia. The company is licensed by the CBK as a Payment Service Provider (PSP) and enables businesses to accept a wide array of payment methods, including M-Pesa, Visa, and Mastercard, both online and at physical points of sale.

Implications for Kenya's Economy and SMEs

For Kenya's vibrant SME sector, which forms the backbone of the economy, this partnership could be transformative. Access to credit and efficient cash flow management remain significant hurdles for many small businesses. The fusion of KCB's lending power with Pesapal's real-time transaction data could revolutionize credit assessment. KCB may be able to leverage merchant sales data to offer more tailored and accessible financing, moving away from traditional collateral-based lending.

This data-driven lending model could unlock significant capital for growth, enhance financial inclusion, and reduce the high failure rate among new enterprises in Kenya. Furthermore, the integration promises to provide SMEs with a unified platform for payments, banking, and business management tools, streamlining operations and improving efficiency.

The transaction is being guided by KCB Investment Bank as the transaction adviser and DLA Piper Africa (IKM Advocates) as the legal adviser. As the deal awaits final regulatory green lights, the Kenyan business community watches closely, anticipating the competitive ripples and innovative financial products that are likely to emerge from this powerful alliance between one of East Africa's largest banks and a pioneering fintech firm.