Category Archives: Remittance

Safaricom launches M-Pesa super-App

Safaricom has formally re-launched the next phase of the M-Pesa app as a rich financial management tool that does not depend on a single network or data to operate.

The M-Pesa service, which now has 30 million users, has been redesigned to allow biometric (face/fingerprint) authorization of transactions as an option to entering a PIN. Users can also load up different transactions, amounts and recipients and approve them all as a single bulk payment. It also allows emojis and images of counter-parties and there is also a “request money” feature.

During Covid-19, Safaricom saw an initial dip in the numbers of business using M-pesa, formally and informally, but a new business app, coupled with online applications for the business till numbers, saw them double the number of business customers from the beginning of the pandemic. Some key new features are that users will be able to add “reasons/notes” to payments, generate visualizations of transactions with individuals and download statements, which are all important to cash flow and fund management.

The app can work in offline mode, does not use data, Also M-Pesa has taken the WeChat route with mini-apps as Safaricom seeks to establish a play store for Kenya. It has fourty mini-apps are in development and seven are now live. One is the Kenya Railways Madaraka Express train service between Nairobi and Mombasa, and booking a ticket on the app gives back 10% to the buyer’s wallet. New users also get 500 MB for each download from the Android or Apple stores.

In the future, there are plans to have the M-Pesa app be accessible for lifestyle and business purposes in any African country. Users will also be able to store their credit card details to fund their wallet, enabling remittance and payment transactions.

M&A Moment: May 2021

Various merger/acquisition (M&A) deals in the last few months in East Africa since the last update.

(1 US dollar equals 110 Kenya shillings)

Banking and Finance: Finance, Law, & Insurance M&A

Kenyan Banks

  • The Competition Authority approved the acquisition of 24.9% of the Montessori Learning Centre by Victoria Commercial Bank.
  • Stanbic Africa gets an extension to the end of 2021 to increase its Stanbic Kenya stake to 75%, by acquiring 14.8M shares from other shareholders through the NSE
  • Mwalimu National Sacco has acquired 100% ownership of the trouble-ridden Spire Bank from business tycoon, Naushad Merali – via @moneyacademyKE

Regional Banks

  • Equity Bank to merge BCDC_RDC & Equity Bank Congo which are its subsidiaries in DRC.
  • I&M Holdings PLC has completed the acquisition of 90% of Orient Bank Limited from 8 miles LLP and Morka Holdings Limited. OBL is the 12th largest bank and a licensed and established commercial bank in Uganda. with 70,000 customers and a network of 14 branches. 
  • KCB Group to acquire 62% of BPR, Rwanda’s second-largest bank, and 100% of Bank ABC in Tanzania – two banks that Atlas Mara had offered to Equity Group.
  • Atlas Mara to sell its Botswana bank, BancABC, and its subsidiary’s BancABC Mozambique to Access Bank.
  • Atlas Mara denies receiving offers from a Nigerian or any other bank to acquire its stake in UBN – the Union Bank of Nigeria.
  • Atlas Mara has completed the sale of BancABC, its Mozambique bank to Access Bank.

Investment Markets and Deal Makers

  • The Johannesburg Stock Exchange to acquire a majority stake in South Africa’s second-largest share registry.

Insurance

  • Allianz will acquire a controlling stake in Jubilee Insurance’s property & casualty business in Kenya, Tanzania & Uganda and the short-term insurance in Burundi and Mauritius for USD 100 million. In the deal, Jubilee will acquire the business of Allianz in Kenya to draw on its global expertise in retail, digital insurance, and micro-insurance.
  • The Competition Authority approved the acquisition of 56% of Agriculture and Climate Risk Enterprise (ACRE Africa) by Zep Re (PTA Insurance Company)
  • The Competition Authority approved the proposed acquisition of 100% of Resolution Leapfrog Holding by Linkham Services.
  • Liberty Holdings to buy out the Coronation (Hilton, Vanderbilt) and Kimberlite fund shares in @LibertyLifeKe in a private deal. Liberty shareholding increases from 57% to 73%, but no plans for a buy out offer and shares will remain listed on the NSE.
  • Monarch Insurance to sell a majority stake (51%) of the company to the Holmarcom Group of Morocco through its holding company “Holmarcom Insurance Activities.” The Kamu Group and Maisha Bank will remain as minority shareholders.
  • Minet Group and Africa Lighthouse Capital have acquired Aon’s shareholding in Aon Botswana, and will now operate as Minet Botswana.
  • Old Mutual Life Assurance has been acquired by UAP Life Assurance for Kshs 2.59 billion.

Remittances

  • The proposed merger involving ECP Africa Fund IV LLC and ECP Africa Fund IV A LLC and Remitix Holdings (Mauritius). Remitix is a Mauritius-based holding company, which holds the business known as the “Mukuru,” a cash remittance technology platform that allows users to send or receive money across various countries in Sub- Saharan Africa and provides foreign exchange services.
  • WorldRemit to acquire Sendwave .. in the last 12 months, the two companies have sent $7.5 billion in transfers (mainly to West and East Africa), generating $280 million in revenue
  • Stripe acquires Nigeria’s Paystack for $200M+ to expand into the African continent.
  • Ghana’s remittance firm Zeepay acquires Mangwee Mobile Money in Zambia – via @SamWakoba

Other

  • The Competition Authority approved the acquisition of 85% of Century Microfinance Bank by Branch International on condition that they each maintain terms agreed with existing borrowers until they expire.
  • South African law firm Cliffe Dekker Hofmeyr (CDH) and Nairobi-based corporate law boutique Kieti Law have agreed to a merger, established under CDH’s name.
  • Kenyan agency banking startup Tanda is expanding its operations regionally after closing a funding round and has secured key strategic partnerships with Mastercard & Interswitch. Tanda’s platform and network supports 58 banks and saccos, 4 telecoms, 12,000 merchants and agents and has served over 300,000 customers.
  • The business of Altima Africa has been transferred to Stratostaff EA Ltd.

Agri-Business, Food & Beverage M&A

  • The Competition Authority approved the proposed acquisition of 50% of Bidco Land 0′ Lakes limited by Aaryan Investments.
  • The Competition Authority approved the proposed acquisition of control of the bakery business of Kenblest Ltd by Kenblest Foods, the proposed acquisition of the maize milling business of Kenblest Ltd by Max Grains and the proposed acquisition of control of the wheat milling business of Mcneel Millers by Kenblest Processors. Kenblest once owned 12.5% of Imperial Bank before it shut down.
  • The Competition Authority approved the proposed acquisition of Glacier Products by ExEo Capital through their Agri-Vie Fund II
  • Eat’N’Go acquires the Domino’s Pizza and Cold Stone Creamery franchises in Kenya – and aims to grow from running 147 stores in Nigeria and Kenya to 180 across Africa by year-end.
  • Certain assets of the manufacturing, production, processing and dealing in agricultural and farm products business carried on by DNC Foods will be transferred to Bigcold Kenya.
  • The assets of the meat processing and food distribution business carried on by Alpha Fine Foods Limited will be transferred to Bigcold Kenya.
  • Coca-Cola European Partners has acquired a 25% stake in Innovative Tap Solutions (PourMyBeer) whose technology allows consumers to pour and pay for drinks themselves, cutting queues, reducing unnecessary contact & wait times, and freeing up staff.
  • The Kenya Ministry of Defense is doing public participation to facilitate the transfer of the Kenya Meat Commission from the Ministry of Livestock to the Department of Defense.
  • The Competition Authority has approved the acquisition of 50% of Propack Kenya by Jaiminia Patel. Propack had a turnover of Kshs 711 million in 2019.
  • EDIT: Tana Africa Capital has acquired a minority stake in Kensington Distillers & Vintners (KDV) that owns majority stakes in Monument Distillers Kenya, Monument Distillers Nigeria and Truman & Orange South Africa. KDV offers high-quality wine and spirit brands and plans to grow its footprint into other high-growth African markets. Tana, a JV between the Oppenheimer Family and Temasek Holdings, has raised $600 million and invested in a diverse portfolio across 20 African countries.

Logistics, Engineering, Manufacturing & Agri-Biz M&A

  • The business and assets of Mindtrac Ltd carrying out the business of e-commerce software development will be transferred to Dukaree Innovations Ltd which will carry on the business of e-commerce software development.
  • Amethis acquired a minority stake in Nouvelle Minoterie Africaine (NMA), a leading FMCG company in Sénégal, which produces and distributes poultry and livestock feed, pasta and wheat flour.
  • Carbacid shareholders vote on the Kshs 1.24 billion buyout of BOC Gases at the end of January and may de-list the acquired company in future. Carbacid set out to acquire 100% of BOC Kenya and BOC accepted the offer and agreed to retire directors, transfer trademarks, and rebrand as all employees will be retained. Carbacid and Aksaya are confident that minority BOC shareholders will accept an offer to buy 100% of the firm at Shs 63.50/share by 6 April. BOC’s board, having sold its 65%, says the deal is willing buyer, willing seller and will not make a recommendation to fellow shareholders.
  • Logistics platform Amitruck and ecommerce platform Sky.Garden announced a partnership to form an end-to-end digital chain for goods pick-up and deliveries to the last mile.
  • The Competition Authority has approved the acquisition of certain assets of Orbit Enterprises by R. K. Sanghani. Orbit had a turnover of Kshs 97 million in 2019.
  • The Competition Authority has approved the proposed joint venture between Elopak AS and Nampak Southern Africa Holdings.

Airline/ Oil/Energy/Mining M&A

  • Heirs Holdings and its affiliate, Transnational Corporation of Nigeria Plc have acquired 45% participating interest in Nigerian oil licence OML 17 (that can produce 27,000 barrels of oil per day) and related assets from Shell Nigeria, Total Nigeria and ENI and have sole operatorship of the asset. The deal involves financing of US$1.1 billion from a consortium of global and regional banks and investors (Afreximbank, ABSA, Africa Finance Corporation, Union Bank of Nigeria, Hybrid Capital, and Amundi).
  • The Competition Authority approved the acquisition of control of Quantum Power East Africa GT Menengai limited by Globeleq, CDC’s energy firm. QPEA is among three firms that were awarded contracts by the Geothermal Development Company (GDC) to develop power plants in Menengai.
  • The Nairobi Securities Exchange suspended trading in Kenya Airways shares following a request from the airline in anticipation of a government buy-out.
  • Express Kenya CEO Hector Diniz gets approval to buy another 5% and increase his combined shareholding to nearly 77%, but with no intention to make a take-over offer or delist the company from the NSE.
  • Transcorp acquired Afam Power Plc and Afam Three Fast Power in a $300 million deal in November 2020.  
  • Amitruck has secured an ‘undisclosed’ investment from Dynamo Ventures and other angel investors after completing the Google for Startups Accelerator Africa.
  • The Competition Authority has approved the acquisition of 60% of Raysut Cement by Zou Fengqi. Raysut had a turnover of Kshs 877 million in 2019.
  • The Competition Authority has approved the acquisition of 100% of Kilimapesa Gold by Mayflower Capital Investments. Kilimapesa had assets of Kshs 742 million in 2019.
  • The Competition Authority has approved the acquisition of (i) Solutions East Africa and (ii) Seagas Kenya by Proto Energy East Africa on condition that 80% of staff at the target companies are retained after the merger.

Education, Tourism, Real Estate & Supermarkets M&A

  • The Competition Authority approved the proposed acquisition of an additional 50% in Nakuru Meadows Development by Pan African Housing Fund LLC
  • Aleph Hospitality, an independent Dubai-based hotel management company has taken over the management of three hotels – Boma Nairobi, Boma Inn Nairobi and Boma Inn Eldoret, which are owned by Red Court Hotel, a subsidiary of Kenya Red Cross Society. In Kenya, Aleph also operates the Best Western Plus Westlands in Nairobi and has been awarded the management contract for a Protea by Marriott hotel in Kisumu, as well as a business hotel to be located in Mombasa.
  • Umubano Hotel in Kigali had been acquired by Madhvani Group for $13M after years under liquidation. The main issue with previous investors has always been a failure to make the requisite investment to expand the hotel which has been managed under Laico, Novotel, Meridian and Accord.
  • Thousands of Airbnb hosts got invitations to buy shares ahead of the IPO, but some did not respond.
  • Treasury plans to merge KICC with the Bomas of Kenya.
  • The Competition Authority has approved the acquisition of control of Mpala Wildlife Foundation Inc. and Mpala Ranch Ltd by  the trustees of Princeton University

Telecommunications, Education, Media & Publishing M&A

  • The East African Safari Classic Rally announced new owners, new management and a new direction for the world’s greatest classic rally, following Minti Motorsport UK’s takeover of the EASCR and Lynn Tundo was appointed as Managing Director of the Classic. 
  • MSP Sports Capital will invest £185m into McLaren Racing (McLaren F1 & IndyCar), acquiring a15% stake that will increase to 33% in 2022, in a deal that values the team at £560m.
  • American investment firm Dorilton Capital acquires the legendary family-owned Williams #F1 team.
  • TransAtlantic Capital Inc has acquired SUREBET, a Kenya licensed sports betting and lottery company. (via Nasdaq
  • Multichoice invested $112 million for a 20% investment in BetKing, a high-growth sports betting group with operations in Nigeria, Kenya and Ethiopia.
  • A trip down memory lane .. serendipitous that eLimu Kenya, a digital educational content firm, that was launched in the iHub, is now being acquired by iHub (CcHUB) 8 years later. – via @AmkaKenya
  • The CcHUB Syndicate that allows angels and early-stage investors to invest alongside CcHUB in high growth technology startups in Africa has funded three startups – Taeillo, Oneport and Stears Business after a due diligence process.
  • Ajua (formerly MSurvey), has acquired WayaWaya, the Kenya-based Artificial Intelligence and Machine Learning known for its innovative Janja platform, that enables borderless banking and payments across apps and social media platforms.
  • Millicom International which trades as Tigo, has signed agreements for the sale of its operations in Tanzania and its stake in the AirtelTigo joint venture in Ghana, marking its complete exit from the African continent.

Health and Medical, Pharmaceutical M&A

  • Mastercard has invested in Kasha Global Incorporated, a purpose-driven e-commerce platform providing essential access to health and personal care products along with the information required to support everyday hygiene needs.
  • The Competition Authority had approved the proposed acquisition of control of Africa Bio Systems by Maisha Holdings.
  • The Competition Authority approved the proposed acquisition of 100% of Dudutech Integrated Pest Management by Bioline Group SAS.

Other Notes

  • The Competition Authority seeks whistleblowers who can confidentially share information on cartel-like behaviour, price-fixing, unsafe products, unauthorized mergers etc. – and they can get a reward of Shs 1 million.
  • Safaricom restructured its strategy and innovation division in FY20 and introduced a mergers & acquisitions department to support strategic acquisitions.
  • Kenya’s Parliament has complained about why the Privatization Commission has not had a substantive board for two years, after the terms of six directors lapsed in June 2019 – and that at a time when the government is engaging with the IMF on the reform of state-owned entities, the Commission only has five directors who are mostly government officials.

PayPal in Kenya: Part II M-Pesa Links Up

PayPal’s reach in Kenya has now been extended to M-Pesa wallets, allowing users of the service to get payments directly to their mobile phones, thanks to a partnership between Safaricom, PayPal and TransferTo.

Under the new service, qualified M-Pesa customers can link their PayPal accounts to M-Pesa wallets, using an “M-PESA PayPal portal”  that will enable them to buy goods and services using M-Pesa to top up their PayPal accounts and this is expected to benefit international ecommerce and remittances. They can also withdraw cash at 148,000 M-Pesa agents around Kenya. M-Pesa has 27.8 million active customers while Nasdaq-listed PayPal has 227 million and is available in 200 markets, allowing merchants to receive funds in more than 100 currencies and withdraw funds in 56 currencies. TransferTo is a Singapore-based cross-border mobile payments enabler. 

PayPal has officially been in Kenya for almost five years exclusively with Equity Bank, dating back to 2013 when Equity and FNB were the only authorized Paypal partners in Africa. Equity is still the only bank in Kenya that PayPal users can withdraw with and during 2017, Equity reduced the PayPal withdrawal time from 8 days to 3 days. Last week Equity reviewed the cost of getting paid using PayPal to as little as 1% for withdrawal amounts that are over $5,000 (~Kshs 500,000), versus 1.5% for payments below $500 (~Kshs 50,000).

At the Equity Bank 2017 results announcement last month, CEO James Mwangi confirmed that usage of PayPal by Equity Bank customers had overtaken traditional remittance channels of Western Union and MoneyGram. PayPal was used for payments worth Kshs 6.2 billion in 2017 by Equity customers, up from Kshs 3.6 billion the year before, and accounted for 21% of the Kshs 30.2 billion worth of payments with another new service provider, Wave accounting for 52% of the value of transfers.

Fintech Companies to Watch and Influencers in 2018

Companies: Last November, KPMG and H2 Ventures released a report listing their fourth annual fintech innovators (‘Fintech100’)  comprising 50 established companies and 50 emerging companies to watch in Fintech.  The companies are innovation across sector like banking, payments, remittances, spending, artificial intelligence, data management, and insurance.
They noted that China continues to dominate the fintech landscape, with 5 of the top 10 companies on the list. Digital or new banks in the list include Solaris Bank, Nu Bank, and Atom Bank.
Some notable companies on the list;
  • ZhongAn (online property insurance)
  • Stripe (frictionless financial transactions)
  • OurCrowd provides an equity crowdfunding platform for accredited investors to access and invest in Israeli companies)
  • Circle (free international remittance via email)
  • Xapo allows users to utilize their bitcoins while Xapo safely stores them)
  • Future Finance (gives students loans of 2,000 to 40,000 pound,  within 24 hours that can be paid over 5 years)
  • Coinbase (enables digital currency transactions)
  • AfterPay Touch (from Australia gives online shopping users an option to spread purchases across four equal installments)
  • Robinhood (free stock trading of US stock and ETF’s)
  • Alan (Europe’s  first digital health insurance company)
  • Bud (enables users to combine bank accounts and get personalised insights from a single source)
  • Capital Float (from India provides collateral-free working capital loans to small businesses within 3 days)
  • Cuvva (provides short-term,  flexible car insurance to consumer groups, including taxi- drivers that range from 1 hour to 28 days)
  • Flutterwave (from Nigeria, is in over 36 African countries, enables individuals and businesses to accept online and offline payments)
  • GrassRoots Bima (from Kenya matches customers with micro-insurance products – known as WazInsure)
  • KredX (from India matches SMEs seeking working capital with investors looking for above-average yield on short-term investments)
  • Leveris (banking platform for digital retail banks)
  • Riby (Nigeria cooperatives enabler)
  • Sensibill (allows bank customers to get their receipts in a few different ways)
  • SoCash (addresses cash logistics issues for banks)
  • Token (an API banking platform)
  • Valiant Finance (an online broking platform for SME’s) 
Influencers: Also, Jay Palter has a list of 195 fintech influencers for the year 2018; have only heard of a few – Brett King (who visited and spoke in Nairobi in January 2017), Yann Ranchere, Elon Musk and Vinod Khosla, but will check out the rest.
EDIT
 
Also,  the new CB Insights report on fintech observations and trends to watch in 2018 cites:
  • No billion-dollar fintech M&A in 2017
  • Chinese firms drove fintech IPOs in 2017
  • Europe saw record for fintech investing in 2017, as Asia and the US saw fintech funding recede
  • Amazon gets more aggressive in fintech — outside of the US, but Amazon’s US efforts are a far cry from Tencent and Ant Financial’s global fintech forays in China
  • The largest deals in 2017 went to companies providing insurance…
  • Startups are allowing Chinese investors to access overseas securities and In 2017, Ant Financial’s Yu’e Bao became the largest money market fund in the world
  • Banks forgo partnering in favor of fighting fintech with fintech 

Kenya Tea Trade Monopoly Pricing Rejected

The Competition Authority of Kenya has rejected an application for exemption by the East African Tea Trade Association (EATTA) to set brokerage commission and warehouse prices. EATTA, which operates the weekly Mombasa Tea Auction, had sought to be exempted from the provisions of section 21 and 22 of the Competition Act No. 12 of 2010 (the Act) on some of its activities for an indefinite period.

The rejection was premised on:

  • The setting of broker fees and commissions under the auspices of the EATTA was a hardcore contravention under Section 22 (1) (b) of the Act as it is a form of price fixing;
  • The setting of brokerage fees was beneficial to the brokers with no express benefits to consumers and tea producers;
  • The Kenyan brokerage fees were higher compared to those in Sri Lanka and India and have remained unchanged for a long period of time;
  • Warehousing is an important element in the tea value chain and that fixing of warehouse fees would undermine innovation and improvement of value preposition to customers given that warehousemen will be assured of the minimum fees set by EATTA. This the Authority concluded that it will encourage inefficiencies in warehousing thus impacting on the trade negatively.

However, the Authority allowed, for a period of three (3) years), the trading to be permitted amongst membership.

Extract from the Kenya Gazette

Other

  • Kenya’s largest foreign exchange earner isn’t tea or tourism but diaspora remittances – @coldtusker
  • During tea processing, 4 kilos of green leaf are required to make one kilo of tea – @dailynation
  • Kenya has the largest tea auction in the world with plans for a tea futures market to get predictability for farmers – Stuart – @INTLFCStone