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Zeepay records 146% CAGR in 2020 despite COVID-19 pandemic

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- EBIT margin up from 28% in 2019 to 40% in 2020.
- Net profit margin rises to 26% for the period.


Despite disruptive effects of the COVID-19 pandemic on economies and businesses globally, Africa’s leading challenger Fintech, Zeepay, has announced a 146% rise in compound annual growth rate (CAGR) in 2020 amid predictions of a decline in remittance inflows to Africa.

The remittance-to-wallet organisation further increased its sales volume to US$400million for the period, Zeepay’s Managing Director, Andrew Takyi-Appiah, disclosed on Tuesday, September 28, 2021 at the company’s Annual General Meeting (AGM).

“During the period our gross profit margin dropped from 88% in 2019 to 82% in 2020, while our operating profit margin or earnings before interest and tax (EBIT) margin increased from 28% in 2019 to 40% in 2020. This is evidenced in an increased net profit margin from 10% in 2019 to 26% in 2020,” Takyi-Appiah told the Business and Financial Times (B&FT) on the sidelines of the meeting, which was held at the Movenpick Ambassador Hotel in Accra.

“In the same year, our earnings per share (EPS) increased to GH¢42 from GH¢4 in the previous year. In 2020, we recorded earnings before interest, tax, depreciation and amortisation (EBITDA) margin of 43% from 36% in 2019. This translated into GH¢6,909,118 in 2020 against GH¢1,477,817 the previous year, and a total comprehensive income of GH¢4,170,558 for the year under review,” he added.

The company, Takyi-Appiah further noted, posted a strong balance sheet position of GH¢68million in 2020 compared to GH¢15million in 2019 despite socioeconomic effects of the pandemic. Also, its return on assets improved by 3% year-on-year. Again, the company’s total equity position saw a mammoth jump – from GH¢1million GH¢21million within a year, which translated to its debt-to-capital dropping to 5% for FY2020 against 64% in FY2019.



Navigating torturous impacts of the COVID-19 pandemic

Describing 2020 as ‘extremely challenging’ Zeepay’s Managing Director recalled how the Fintech company had to deal with disruptive effects of the COVID-19 pandemic on livelihoods, witness Brexit turn a concluding page, and come to grips with the challenge of a demoralised staff-body during the lockdown.

“Brexit alone was a challenge, because it meant that the company had to reapply for licence across the European Union states,” Takyi-Appiah said – forcing the company to scale-back Board of Directors. The scale-back of operations and shrewd management throughout the pandemic ensured that Zeepay experienced growth and fully implemented its 5-year growth strategy – Project Sprint.

“This was partly achieved through the discipline we employed to be more efficient and to reduce operating costs while working hard to achieve our objectives,” the Managing Director stated.

Zeepay’s focus on innovation and technology enabled it to increase its sales volume to US$400million for the period, and “better serve our global multinational clients with our digital distribution services for payments and remittances,” Takyi-Appiah said.

Although remittance inflows declined globally, performance within Zeepay’s critical markets remained strong in 2020 as it resorted to synergies and the use of multiple strategies with partners – such as a free online service with MoneyGram International, Inc. for Ghana and Small World Money Transfer for Uganda. The company further continued its focus on international expansion and managed to serve eight active corridors with 30-day business at the height of the pandemic.

“The most challenging period was the first quarter of 2020, during which we experienced a temporary decline in service caused by an immediate impact of COVID-19 on our partners. We however managed to steer in the waters by end of the second quarter; partly by increasing trading lines and launching aggressive marketing campaigns across multiple jurisdictions,” the Managing Director stated.



New status and plans for the future

In March 2020, the Bank of Ghana granted Zeepay a full Electronic Money Issuer (EMI) status, making it the first Fintech to be licenced under the Payment Services Act 2019 ahead of its peer group – namely MTN mobile Money Limited, Airtel Tigo Mobile Financial Services, and Vodafone Ghana Mobile Financial Services Limited, and the first non-bank institution to be issued with such licence in the country. The development ensured that Zeepay acquired full mobile money operating status.
This notwithstanding, Takyi-Appiah assured that Zeepay “will continue to operate as a remittance-to-wallet organization, and focus on improving last-mile access for remittance receivers while working to drive the cost of remittance down at the send-side and to improve financial inclusion as a whole”.

The company intends to achieve this objective through the provision of remittance-related services to its clients over the next three years, in line with its scale strategy.

Paa Kwesi Yankey, the chairman of Zeepay’s Board of Directors, added that the company obtained approval to operate in Francophone West Africa under the sponsorship of a local bank, and launched its services starting with Ivory Coast during the pandemic.

“We also expanded into more African countries, including Mozambique, to serve the Southern corridors to Mozambique’s corridor with one of our strategic partners. In March 2020 we also obtained our licence from the Bank of Ghana to operate as an electronic money issuer. In December 2020 we met our regulatory cash capital requirements in the amount of GH¢20million – ahead of the deadline set by the Regulator for December 31, 2020. Led by Investisseurs & Partenaires, a French private equity, we embarked on a fundraiser to further strengthen the business and position it for growth,” he said.