Kenyan-owned Octagon Africa has bought a 49 percent stake in a pensions business formerly operated in Zambia by Alexander Forbes Financial Services.
Octagon Africa Group chief executive Fred Waswa said the investment is the culmination of a collaboration with the Johannesburg-listed firm, which started with the Kenyan company opening its representative office in Lusaka last February.
“We have had a team there (Lusaka) familiarising our Zambia team with our company culture while creating a new learning platform that will guide the formulation of future products for our various markets,” he said.
Mr Waswa, however, declined to disclose the value of the deal, saying they had signed a non-disclosure agreement on the investment amount.
“We believe the deal gives Octagon new space to serve the over 40,000 members in Zambia,” he told the Business Daily.
Alexander Forbes Emerging Markets chief executive Bonga Mokoena said their decision to dispose of the business was based on their board’s decision to concentrate on an advice-led solution platform.
“We decided to exit some in-country operations including Zambia where Octagon Africa is the best fit for our business and are confident that our clients are assured of excellent service as always,” he said.
Octagon has been operational for the past 12 years serving 200 corporate clients in Kenya, Uganda and Zambia.
Octagon Africa, which is majority-owned by Mr Waswa with 70 employees at its Kenya, Uganda and Zambia businesses, recently introduced a mass-market mobile phone-based retirement savings product dubbed Mobikeza for the Kenyan market.
The plan allows individuals to save as little as Sh1 through their mobile phones as well as make withdrawals after 14 days.
Octagon’s plan to deepen pension coverage comes months after industry regulator, Retirement Benefits Authority (RBA), said it targets to more than double pensions savings to Sh2.4 trillion in the next five years, riding on mobile phone-based products.
The RBA is eyeing at least 600,000 new pension contributors yearly by reaching out to segmented groups riding on innovative solutions like mobile-based savings.