KCB plans to buy 22.23% of Pesapal as banks move deeper into SME payments

KCB Group is seeking to buy 22.23% of Pesapal, according to details published by Tanzania's Fair Competition Commission as it reviews the transaction. The percentage was not disclosed when KCB announced the investment in November 2025. The bank has also not said how much it will pay for the stake.

The transaction still needs regulatory approval.Pesapal provides payment and business-management services to companies in Kenya, Uganda, Tanzania, Rwanda and Zambia.

Its products include payment processing, point-of-sale systems and other tools that businesses use to accept payments and manage transactions. Its customers include companies in retail, hospitality, travel, fuel and other sectors.  KCB already operates in several of the same markets. The proposed investment therefore puts the bank alongside a payments business that works directly with merchants and other companies.

The SME connection

For smaller businesses, payments are one of the more basic parts of running a company. A shop needs to accept cards and mobile money. A restaurant needs to process payments quickly. A small hotel needs to take bookings and collect money. A fuel dealer needs payment systems that can handle transactions throughout the day. Pesapal provides some of these services.

KCB, on the other hand, provides banking and lending products to businesses. That creates an obvious connection between the two businesses, although KCB has not said that the proposed investment will result in a new combined SME product. If the investment is approved, there is room for the two sides to link payment activity with banking services more closely.

For example, payment data can give a bank a clearer view of a business's daily sales. That information can potentially be useful when assessing a business for working-capital finance or other credit. It is important to separate that possibility from what has actually been announced. KCB has not said that it will use Pesapal transaction data to make lending decisions, so it would be premature to say the deal will automatically make it easier for SMEs to borrow.

KCB already has a relationship with Pesapal

This is not a new relationship between the two companies. In 2025, KCB and Pesapal announced a financing arrangement for fuel dealers across East Africa. Under that arrangement, Pesapal provides payment and forecourt-management systems while KCB provides financing. The proposed equity investment would take the relationship further if it is approved. KCB would become a significant minority shareholder in the company rather than simply working with it as a banking partner.

KCB has also bought Riverbank

Pesapal is not the only payments-related company KCB has invested in. In December 2025, KCB completed the purchase of 75% of Riverbank Solutions, a Kenyan company involved in payment processing, revenue collection and business-management technology.

The two deals give KCB exposure to different parts of the payments market. Riverbank works with payment and collection systems, while Pesapal has a large merchant-facing operation across five countries. For SMEs, the practical question is whether this eventually means fewer separate systems to deal with when accepting payments, banking and applying for finance. That will depend on what KCB and Pesapal do with the relationship after the investment.

Pesapal's reach matters

Pesapal operates in Kenya, Uganda, Tanzania, Rwanda and Zambia. That gives KCB a payments business operating across several markets where the bank itself has a presence. For businesses operating in more than one country, cross-border payments can be complicated. Companies may have different banking relationships, payment providers and systems in each market.

A payments platform operating across several countries can potentially reduce some of that fragmentation. Again, there is no announcement that KCB plans to create a new regional SME product through Pesapal. The point is that the existing footprint gives the two businesses several markets in which they already operate.

Tanzania is still reviewing the deal

The Tanzania regulator is involved because Pesapal has a local subsidiary. KCB is buying shares in Pesapal's Kenyan parent company. If the transaction goes through, KCB would have an indirect interest in Pesapal Tanzania. The Fair Competition Commission has opened the transaction for review and invited interested parties to submit comments.  The transaction is therefore not final.

The price has not been disclosed

KCB has not published the amount it intends to pay for the 22.23% stake. Its 2025 financial statements show that Pesapal owed the bank KSh1.2 billion at the end of December 2025. The accounts do not say that this amount is connected to the proposed share purchase.  So the main new detail is the size of KCB's proposed holding. The bank first announced its investment nearly a year ago. The latest regulatory disclosure gives a clearer picture of the transaction and confirms that KCB is seeking a 22.23% minority stake.

What it could mean for small businesses

For SMEs, the immediate effect is unlikely to be dramatic. The transaction still needs approval, and neither company has announced a major change to Pesapal's products. The more interesting issue is what happens if KCB connects its banking services more closely with Pesapal's merchant network.

A small business that receives payments through Pesapal could potentially have access to a wider range of banking services from KCB. Payment records could also become more useful when businesses apply for financial products, although any such system would depend on the products KCB eventually develops. There could also be benefits for businesses operating across Pesapal's five markets if payment and banking services become easier to manage across borders.

There are other issues SMEs will need to watch as well. Greater integration between a bank and a payments company could change pricing, product choices and how businesses interact with their financial providers. Competition between banks and independent fintechs will also matter. For now, none of those changes has been announced. The deal is still waiting for regulatory approval, and the purchase price remains undisclosed.

What is clear is that KCB is seeking a 22.23% holding in a payments company with a regional SME customer base. What it does with that stake will determine whether the deal becomes more than an investment on paper.