Stanbic IBTC Holdings Plc, the Nigerian arm of Standard Bank Group, is set to inject ₦4 billion into its fintech subsidiary, Zest Payments Limited, as part of its strategy to bolster its presence in Nigeria’s competitive fintech market. The recapitalization is part of a ₦148.71 billion capital-raising initiative, with 3% of the total funds allocated to two subsidiaries.
According to Kunle Adedeji, Acting CEO and Group CFO of Stanbic IBTC, “Around 3.6% of ₦148.71 billion, which is five billion naira, will be used to recapitalize two subsidiaries. Zest Payments will get about four billion while one billion will be given to our venture business.”
Struggles in a Crowded Market
Launched in May 2023, Zest Payments has faced stiff competition from older fintechs like GTCO’s HabariPay and Access Holdings’ Hydrogen, which have already turned profitable. In 2023, Zest recorded a loss of ₦1.2 billion against a total income of just ₦68 million. Losses further widened to ₦1.89 billion in the first nine months of 2024, despite income rising to ₦93 million during the same period.
However, CEO Stanley Jacob argues that Zest is still in its early stages, stating that the company’s real operational year began in October 2023. “The likes of Hydrogen and HabariPay are 18 months older than Zest,” he said, highlighting the company’s relative youth.
A Unique E-Commerce Strategy
Unlike competitors focusing on digital wallets or switching services, Zest has carved out a niche in e-commerce. Its flagship offering is a free e-commerce storefront designed to help small and medium-sized businesses establish an online presence. The platform features customizable product listings and integrates various payment solutions, including QR codes, USSD, card payments, and bank transfers.
Zest also holds licenses for payment facilitation and Value-Added Services (VAS), enabling bill payments. “Our strategy is e-commerce because our banking group supports lots of small and medium businesses,” Jacob said, adding that the platform currently hosts 25,000 products on its marketplace.
Path to Profitability
Zest Payments’ recapitalization underscores Stanbic IBTC’s commitment to revitalizing its fintech ambitions. The ₦4 billion funding will provide much-needed resources to improve operations and accelerate growth in the e-commerce sector.
While the road to profitability remains steep, the recapitalization offers Zest a lifeline to refine its offerings, attract more businesses, and position itself as a key player in Nigeria’s evolving fintech landscape.
As the fintech space continues to grow, Zest Payments’ success will hinge on its ability to scale its marketplace and effectively leverage Stanbic IBTC’s extensive support for small businesses.
