Optasia Limited (OPA) Earnings Call Transcript & Summary

Good morning, everybody, and welcome to this results presentation interim results for Optasia, first half of 2026 that we have released this morning. I am Salvador Anglada. I am the Group Chief Executive Officer and with me, I have Avi Lasarow, the Finergi CEO; and also Mariusz Dabrowski, he is the Group Chief Financial Officer. In between the 3 of us, we are going to run this presentation today. We're going to go through the highlights of the first half of the year, also go deeper on the financials and I want also to deduct on the last acquisition we did, Finergi that was completed in the first half of 2026. For the people that maybe they are joining us for the first time, just to say that Optasia is the leading platform, enabling our partners to scale the financial inclusion, scale the credit across the different geographies. We are the intelligence layer. We are the ones that are able to understand the patterns, the behaviors, the unstructured data that exists in the market. And with this, we are able to understand the affordability of people in order to get a loan. It's not about if they are affordable, they are eligible. It's about how much in order not to default. And that's why we are able also to underwrite the risk. We are doing that at scale and that means 35 countries, and that means providing service to more than 100 million unique customers per month and also to distribute this first half of the year, $3.5 billion. We like to say that our purpose is turning our potential into financial progress. And our vision is a world where financial progress reaches everyone. Having said that, as a form of introduction, let me jump into the numbers for the first half of the year. Impressive growth all across the different dimensions. We have pushed our top line up to 50%, more than $185 million. Our adjusted EBITDA is close to $80 million, and that means 45% growth year-over-year. And our normalized net income also grew 40%, close to $39 million. This growth comes with a strong cash generation. If you compare with 1 year before, our free cash flow reached close to $33 million, which means 150% more than 1 year before. And the free cash flow conversion reached 42%. On the back of this growth, what we have is our MFS business that continue grow significantly. Only this first half of the year, the growth was 84%. And that means that the mix is shifting, as you know very well from ACS to become MFS company, Micro Finance Solutions company and the mix now is 72% coming from 62% 1 year ago. Also, just to highlight how we continue managing the growth and managing the credit performance under risk. Our default rate is at the level of 1.3% blended with all the services and the cover ratio, which is the ratio between the revenue and the default rate it's above 4x. To highlight that not only the performance is on the financial side, but also, we are progressing in all our strategic objectives. We continue growing our deployments. We are launching new deployments. We are expanding the catalog of products, and we will talk about that. And also, we are expanding the distribution rates. Very important, our third vertical synergy that will come start contributing in revenues in 2027, but also banking as a rail. And I will talk about that also as part of this presentation. When we compare our numbers with a full year target, we can see that we are well ahead in most of the parameters and especially on the top line growth. What I can say as well is that we are in a very good trajectory to deliver these full year targets and also to highlight that we have updated these targets, and we will comment on that at the end of this presentation. But also I want to alert everybody that we should not just compare the growth and translate the growth of the first half of the year to the second half because there were some specific developments element that will pay tune a very interesting second half of the year with high growth as well, but maybe lower than the one that we have had in the first half of the year. And some of these factors are well known, and I will talk about that. Definitely, one of them is the suspension of the service in Nigeria that happened in the second quarter of the year. As everybody knows, the service has been resumed, but the speed of recovery and the structure of the market has changed, and I would like to comment briefly in the next slide. Also to highlight that we have the transition of one service overdraft service from one of our partners to be delivered in South and this will have some impact in 3 markets, 2 of them are already completed, which is Uganda, Ghana and the third one, which is coming on should happen any time in the second half of the year. It's important to highlight that because it will have some impact on our revenue growth profile, but definitely much less impact on the profit of the service because it was a low-margin service with high volumes, the one that has been transitioned to be delivered in-house. Last but not least, the currency has impacted us positively in the first half of the year, the strength of some of the currencies against dollar has held the pipeline, but it's not expected that this will be -- will continue in the second half of the year. So I think it's important just also to discount the effect of the currency in our figures. If I jump into Nigeria specifically, just to say that the service has been resumed for the ones that are not aware, there were regulatory situation issuing between 2 regulatory bodies, to which one has the authority to regulate it. I think the situation, first of all, it's much more clear now in between these 2 entities. Second, also, we have all the relevant authorization coming, in this case, by the competition and consumer protection commission to operate the service. The service were resumed by all the operators in the market end of June. Maybe the difference now on the way that this service is going to be recovered are to, first of all, the path of recovery. The service is now running a significant less volume than it used to be. And in my opinion, it will take 6 to 9 months to recover the full speed that we used to be in the past, but second, also very important, the structure now of the market has been equalized across all different players. And we are -- in any of the cases, we are not providing the services stand-alone. We are going to provide the service in a marketplace and the customer allocation will be based on performance. So we will see how much we are going to be able to recover in terms of share of wallet. Although I have to say that we are optimistic,of course, taking into account our trajectory and the way that we perform the services. When we try to summarize this effect, and I think it's important -- this slide is important because I want to create the right expectation also moving forward. I mean there are impacts that are transitory impacts, and this is the case of the Nigeria, it's run rate that will recover, but we need to understand what is the pace -- the pace of that recovery, the speed of that recovery only for everybody to know, we try to be conservative in our outlook and also to get upside as much as the recovery is faster. There are aspects that are more permanent. This is the case of the transition of the overdraft service from one single partner that will not contribute to our revenues in the second half of the year. And definitely, the FX effect, we don't know, but we believe that the effect -- the positive effect that we've seen in the first half of the year should not be repeated or at least it will be much lower than the one that we've seen in the first half of the year. That gives a very good illustrative base for H2. We build a bridge in between H1 and H2. And from here, of course, the growth is going to be significant, underpinned by our organic growth, underpinned by our underlying growth. And also, we believe the contribution of Nigeria moving forward in the next 6 months. Going towards our strategy and how we are -- we continue evolving our propositions and our markets, we are quite satisfied in the way that we're opening up new sources of revenue. First of all, because, I mean, our existing deployments are performing very well, and I will give some details in the coming slides, but also because our pipeline is rich and our developments in delivery are also high. And I will give also details, but we can expect this year to have at least 11, if not 12 new deployments up and running on the overall year. The propositions also are being expanded. We have the opportunity to launch a new lending service for merchants that will be very important for us in the future, and I will comment it also about that. But even more important, we are expanding our distribution rails. We believe that banking is going to be a very important rail for us in the future. You will see some examples later on. And of course, Finergi, the utility market, the opportunity to provide advance in the utility market is a greenfield for us. It will be -- we believe, is going to be a big contributor of our revenues in the future. Talking about our existing deployments and our new deployment has been a very fruitful first half of the year in most of our deployments, both in Asia and in Africa, I have just highlighted some of them, Pakistan is doing very well. We are expanding the customer base and eligibility and also the nomination of the different customers. We continue going up in terms of the value of our loans. Congo B has been a very nice opening in 2025 that is scaling very well across the first half of the year. And of course, we have Ghana that is doing -- is working very well. It's a multi-partner, multi-proposition jurisdiction also, in this case, held by the strength of the city and also Indonesia continue performing at high speed. In terms of the new deployments, we have as the close in the first half of the year 3. If we talk today, we are talking about 5 life and 2 in a pilot, which means ready to go. But the ones that we can report now because this is first half of the year, information are 2 new countries, which is Gabon and South Sudan and a new proposition in an existing country, which is Ghana. As I said before, we are deploying 12 new -- we are evolving in 12 new deployments that all of them are in a delivery phase. And as I said, the minimum we're going to get this year will be 11. Hopefully, it will be more if you compare with the 7 that we did last year, I mean, clearly accelerating in our capacity to deploy it across geographies and markets. The markets continue being under development, very important for us, Ethiopia, Mozambique and Kenya. We are progressing quite nicely. But I'm not sure some of these will be the ones that are going to be live in 2026, definitely, I would say, all of them with services up and running on MFS in 2027. When we talk about our propositions, as I said, always one way of expanding our business is to launch additional proposition and complement existing ones that allowed us to segment it better. The market that allowed us to increase the eligibility of our customers, proposition that can be launched in existing deployments, proposition also that can be launched in new deployments. Maybe to highlight the importance of the merchant lending proposition that was live in Ghana in the first half of the year and now is live also in Uganda. Very, very important because it comes with a need that exists in the market. I would say we have a reach by life of merchant lending proposition across the different jurisdictions because there is no clear differential proposition in the market, looking at how to hold financing the working capital, providing flexibility in terms of the loans, also the repayment, the possibility to include installments. All those are the pensions and the future that were included as part of the proposition. And as I said, it will be expanded across the different geographies. Very important, the evolution of our partnership with SMB, with FirstRand, everybody knows that increased the shareholder position in Optasia, in this first half of the year, reaching 26.9%. But here, more than that, what is important is the evolution of the partnership opportunities that we see when we put, I mean, both companies together and the capabilities of both companies together in the different markets. Maybe the good news is not only that we have a rich pipeline. The good news is that we have been able to launch in record time, the first 2 propositions working together. The first time -- the first one is Airtime Advance. We are supporting FNB Connect [indiscernible] services in South Africa. So we are embed our capacity to create score their customers and to provide Airtime Advances to them, it's live only 2 weeks ago, ramping up importance in the market, but I mean very satisfied with the approach, the collaboration and definitely the speed of the deployment. Even more important, the first MFS proposition launched in between both companies, a cash advance proposition that is going to be embedded in the FMB wallet ecosystem in South Africa. It was live last week. It's live now, and we will see also how it's going to progress. But it's a very good example of how we can collaborate with FNB. We can collaborate and we can use banking as a rail and also the opportunity, specifically with FNB to expand our services in other geographies where we have presence and they have also presence. Let me just finalize and just I'm going to hand over to Avi to continue with the utility, but maybe to give some snapshot some information how we continue progressing investing in our platform, in our models. It's a lot of activity, allowing us to be better to automate a process to allow us to go faster, but also to enhance the profitability, the new models that we are start to expand in some of our deployments, the reinforcement learning decision in methodology that has also been under deployment is helping us to enhance and improve our profitability with the same customer level and with the same activities, more about how precise we can be also improving and advancing our models. And also, to say that, I mean, other functionalities has been added to our platform. We can talk extensively about that. But I would like to highlight at least one that for me is absolutely critical, is what we call dynamic pricing that allowed us to personalize offer to the customers. Until today, we have the same type of proposition for the different customers, of course, not the same limit, but yes, the same type of proposition with this new functionality that we have developed, we will be able to personalise depending on the affordability and also the credit worthy of the different people, allowing us, in our opinion, to enhance and improve the eligibility and the penetration within the market. With this first introduction, let me hand over to Avi. Avi is the CEO of Finergi. He joined at the time of acquisition. He's doing a fantastic job. And I would like him to go deeper and give you a lot of color on what we are doing in Finergi. Avi, please?

No. Thank you, Salva, and good morning, everybody. So I'm going to take 10 minutes talking about Finergi. Finergi is Optasia's third vertical, lending vertical. As you know, you all know extra time, which is for the advancing of Airtime extra cash, for the advancing of money, mobile money. And now we have extra power what is essentially the advancing of electricity. And with extra power, it's underpinned by a similar sort of decisioning engine when recovery mostly the meter. But what's really important is actually power points at an essential need, which is to help consumers electricity when they run out. So what's driving this market, very important is the acceleration of the rollout of prepaid meters. And this rollout of prepaid meters ultimately solves the debt problem that municipalities and utility companies have. At the same time, what it does is it creates a consumer problem and creates the problem for the consumer. So many of our target consumers that we serve actually have small irregular incomes and not always pay for the prepaid electricity. And that's what actually power actually solves. It gives that ability as needed, when needed. And it's very important to say that the market is actually being driven by the need for acceleration of electrification through programs such as Mission300. Mission300 is supported and advanced by the World Bank and asset development bank and ultimately, have signed energy contacts with 17 priority countries in total of 30-plus countries on the continent. And this is really important because there's a policy incentive to actually roll out these prepaid meters of which Finergi has approximately 53% of written protection in these Mission300 countries. Just to say, from an Optasia perspective, it's very exciting because it provides a new rail a potential future rail for recovery and of course, a new distribution rail as well. What we've seen potentially, of course, subject to regulation, data protection laws in various countries we operate is that it might be possible, for example, for some of this data to be used to enhance the Optasia data to get better eligibility and so on. And of course, differentiated IP because what we do as Finergi is we actually plug into the utilities billing system, which means from a recovery perspective, we can read the central debt ledger and work out how much is outstanding before maintaining that recovery position. A very high level how the service works. Consumers have a need, as I said, when electricity runs out they do? Typically, they can either be eligible for a service that might exist on an existing platform or if they're not eligible, what they're able to do is potentially go to a point-of-sale service at a market or at a street, for example, to get the electricity. But if they can't get there, it's the middle of the night. What we're able to do very quickly through the meter is provide a credit score and ultimately advance electricity at time of need. Very important for the utility company, electricity generated and not used is lost. So what we actually do is we provide efficiency to the utility company because they're able to essentially sell more electricity at the time of need. And very briefly, we access or consumers access this through the regular channels that we know, USSD, SMS, WhatsApp, et cetera. Thank you. So if you look at our process towards commercialization, I'm very excited to say looking at the map, I'm very excited to say that we now have pilots live in 3 countries: Namibia, Uganda and Lesotho. In half 2, we're expecting to have pilots up and running in Zambia, Guinea Conakry. And later on, of course, in the pipeline, we have Ghana, South Africa, Zimbabwe, Botswana, and Ethiopia. Our future pipeline, of course, is Indonesia, Egypt, Benin, Kenya, Rwanda and Cameroon. What you see on the right is you see a funnel and you can see that Finergi , in all paces goal is to connect into the utilities switching platform, which is their billing system, their central debt ledger. And that's really where we are able to throughout the ecosystem, obtain the recovery. So consumers would normally take an electricity advance through a regular channel it could be a retailer, it could be a POS vendor, it could be an MNO. But ultimately, what we seek to do through integrating with the utility is attain that recovery anywhere else they go into the market, which is very important. And within our go-to-market strategy, we have discovery, commercial utility and utility. Our goal is to get to the utility as the primary objective for us is the Finergi business. Inside these POCs that we're doing, you can see we are actually validating various elements of the commercial model. So for example, you can see demand. We've validated the advance that's been taken across the pilot projects, recovery across the full life cycle of the product itself. And of course, now we are testing the final unit economics at scale as well as the distribution and scale of the product across the ecosystem. Thank you. Over to Mariusz.

Thank you, Avi. Thank you so much. Good morning, everybody. In the next couple of slides, I will have a pleasure to present the financial performance of the business, very strong performance, very strong financial performance of the business. What I will show you is also how the growth is translated to profitability, how we create the values by increasing the cash conversion and how the headlines EPS develop over the period of time. At the end of my presentation, I will also present how we see the funding and how we see the strategy about the capital allocation. So let me jump to the numbers. I will not spend a lot of time on these numbers because I've already present you a lot of the details -- what I would want to count show you is that, first of all, to highlight a few points. The growth of our business of the distribution value when we kind of help our partners to provide the financial services to the end customers increased by 46%. Our revenue increased even with the higher speed of the 58%. Of course, we are not only the Golf company. We are also the company would deliver the profit. So you can see that our profitability increased the same speed delivering $77.9 million of EBITDa, at the same time having the normalized net income growing by the 40%, close to the $40 million in the first half of 2026. What is important to mention and highlighted is a tremendous and the strong growth of the cash flow generation, which I'm very proud of. You can see that the cash flow generation, cash flow increase over the period of time within the 1-year time by 150%. We do it because our cash conversion increased to the 42% from the adjusted EBITDA. We do it at the same time, keeping the risk in the same level. What I mean by this, our cover ratio is 4x. You remember during IPO, we guide the markets that we want to keep our cover ratio in this range, and we just exactly in the range of the 4x. Our gearing stays very healthy, beginning being below the 1% that was our guidance, actually, it's 0.2%, yes. So let me jump to the growth and how the growth is generated and what is the driver. So as I mentioned before, we have a significant growth of the distribution value of the 46%. But what is more important is the shift between the products. What I'm trying to say is that let's say, the growth of the MFS is even more. We doubled the distribution of MFS. So financial products increased more than 100%. That drives, of course, the change of the shift of the mix. We're increasing the MFS business from the 62% to the 72% within 1 year time. That enabled us, of course, due to the fact that the MFS have a higher take rate, revenue faster than the distribution value. Therefore, this is the reason why our revenue is growing by the 58% comparing to the 46% on the distribution value. And as I mentioned before, the adjusted EBITDA follows increasing over a period of time, the same speed. Of course, it's also interesting to understand how the dynamics of the revenue and the default come works and why is driven by the change of the mix. I think the biggest driver of this change is, of course, the fact that our distribution value of MFS increased, as I mentioned before, to the $1.9 billion, so doubling comparing to the previous year. That drives 2 things. First of all, our take rate increased from the 4.9% to the 5.3% in this period of time, a slight increase of the default from 1.1% to the 1.3%. And as I always keep repeating that I will be just repeating over and over again. What is more important is the relation between the revenue and the default. As you can see, this relation is defined as a cover ratio. And we just keep it constant, 4x. And that we should expect it from us as a business that we keep the risk unpacked. We're actually controlling the risk. And with the control of the risk, we are able to drive the growth of the business more than 100% year-over-year. The revenue, of course, drive other metrics, which is quite good for us. What I'm trying to say is we kind of get economy of scale. If you can see on the slide, we will be presenting to you parameters. Our operating cost is compared to the revenue, how this much develop over a period of time and how the capital expenditures develop over the period of time. The absolute value growth, of course, but the economic of scale enable us this parameters to be the better. What I'm trying to say is operating expenses as a percentage of revenue drops from the 13.2% or 11.6% and our capital expenditures is below our target level 6% being the 4.5%. All of these elements is quite valuable for us, of course, to drive later on, the cost contribution. To understand the cash conversion, you have to also understand the working capital intensity. What I'm trying to say is, for us, the working capital is the investment. So whenever we start doing deployments, whenever I would like to kind of increase our platform capability, we have to invest in the working capital. So in absolute volume, our net working capital increase over a period of time by the 43% but we have to read these numbers in the context. And you have 2 numbers, which I already mentioned in my presentation, one being distributed value. The distributed value can of increase at the same period of time by the 46% the revenue, which is actually the main drivers of the net working capital intensity drive by the 58%. So the point I'm trying to kind of bring home is that our effectiveness of the net working capital increase over the period of time. So in other words, the net working capital drive increased slower than the growth of the business. At the same time, the parameters, which is defined as a change of the net working capital as a percentage of the last 12 months revenue also decreased. You also remember, during our con at the investors meeting and the different presentation, I was guiding you that the increase of these parameters is temporary because we invest in the business, and these parameters pans will be dropping. And you can see there's a proof points but we're dropping these parameters to 12%, and we're expecting these numbers to kind of go further down with the high single digits over the next period of time. Of course, that better performance of the net working capital, let's say, the development drives the adjusted free cash flow conversion. So you can see that we increased our cash conversion, so the absolute cash generation by 150% within the 1 year time. But also kind of enable us to increase the adjusted free cash flow percentage to the 42%. That element you can expect it to kind of continue. We have a business which is not only generating the profit but, of course, the cash flow. And then, of course, I will elaborate about these elements during my capital allocation strategies in the few slides. What is important, of course, for you as shareholders is the way how we -- while we kind of perform in the different metrics related with the earnings. So on the slide, you can see the 3 parameters we just pick up for this presentation. All of them is growing kind of the more than let's say, you can expect it from the market. So like we're growing the normalized [indiscernible] by the 40%. The profit after tax reduced with all of the one-off adjustments going even higher by 58%. And the headline EPS is growing by the 50%. So all of them is very strong performance. And I'm quite pleased to kind of announce that, that's, of course, driven by our diversification because of the strength of the growth, change of the strategy, everything drive those numbers up. And you can ask about the funding. So what happened on the funding and why kind of getting this efficiency. So I give you a few numbers in the perspective. So of course, we talk about these numbers in the few slides before, the revenue is growing 5% adjusted EBITDA growing kind of by the 45%. But look at what happened with the other parameters, which is a driver of the growth in the future. We cannot get efficiency. And I was always telling you that the more we go, the better efficient we can be and this is the one of the representation of this element. You can see that our cash collateral is increasing at the same time below the 10% and the bank guarantee increasing only by less than 4 percentage points, and the debt actually stays stable, no increase. The reason is, of course, the more we go, the more experience we have, the better performance we have and the less collateral and then less investment you can put into the business, still driving the growth. And this is one of the effect of the efficiency which you can expect from us in the future as well. [indiscernible] allocation. I think this is more about the framework and this is more about the strategy. So it's kind of like a reminder, I will not be talking anything which is surprising to the market you always expect the business like us growing quite fast with the high return from the equity, we'll invest in the organic growth. So investing in the CapEx, we're investing in the platform and all of these elements as we guided to you, we'll be investing 6% of our revenue in our organic growth, and that will stay. The next element, which you can consider as a healthy business, of course, to looking for the M&A, but we'll be looking the opportunistic. This is the selective approach to M&A only if something happens. And only if this opportunistic possibilities drive the growth for our shareholders. And the last but not the least, quite important, as we are generating the cash and we have quite high cash conversion, we'll be, of course, sharing this benefit of the high conversion to our shareholders. We can shed the 2 forms: one being the share buyback and second one is the dividend, ask the question, which one is the most important for us, it depends on the share price, yes. So of course, you can calculate the model and depending on the share price, we use one d1 of these 2, depending on the situation. So just before I hand over to Salva,, summarizing. Very strong growth translated to profitability. At the same time, we're generating very strong growth of the free cash flow reported, yes. Salva, I hand over to you.

Very good. Thank you. Thank you, Mariusz. Let's finalize and so let's open the room for your questions. Let me maybe give you a view for the end of the year and our target, the one that we want to achieve. We are confident we're going to be able to deliver on our targets, and we are confident enough to upgrade those targets and expand those targets as we speak. We are foreseeing growth in revenue and adjusted EBITDA in between 30% to 40% in the global year-end. And we are also upgrading our guidance from $25 to $35 [indiscernible] in normalized net income back to 30% to 40%, keeping the capital expenditure at the same level, 6% over revenue. This, of course, as I mentioned before, it's supported by the extraordinary growth on our -- most of our deployments and our diversification strategy, but also -- and I want to say it includes a very conservative view of Nigeria and the recovery that we believe is going to be honestly better than the one that we have included here, but we want to be conservative in that front. At the same time, also, we have a stable view of the currencies -- of the different currencies against the dollar in the next months. Those are elements that have been included in those specific numbers. But for us, of course, it's not only about delivering on the '26, as everybody knows, we are working also for the future. We are investing in new railways, we are pushing across our deployment, the new deployments, the new products and the new distribution rails. Very, very important for us to deliver on our new deployments. As I said, at least 11 need to be live at least this year, if not more, and this is the number that I can also share with all of you. We continue scaling our proposition now that we have merchant live, we want to have additional deployments in the pipeline, and this is what is happening. But also we want to complete some other services that I have not talked about but are in the process to be completed. Very important, the line of credit. This is a new proposition. This is a revolving proposition that allowed to provide amount to the customer that they can draw and they can pay and withdraw again in a given period of time. It works like traded carries like a virtual credit plan and be on the wallets. Also, this proposition is on the way, and there is our first customer coming, of course, taking it, and we believe it's going to be expanded across the geography. The same as telco by now [indiscernible], which is a way to provide installments to telcos and to convert prepaid proposition to postpaid without taking the risk. Last but not least, of course, the diversification. Finergi is one, all what we are doing with FNB, but also to say that we are opening up the pipeline of additional opportunities on the banking side, not just banking being the lender on record, but banking, of course, been the distribution channel to provide services to our customers. We are focused on execution, and we believe all this will not only fit, I mean, what we are doing in H2, but definitely 2027 and onwards. And with this, I believe it's time to open up for question for everybody. Thank you very much for your attention.

Thank you, Salva, Mariusz and Avi. Good morning to everyone who's joined the call we will now start taking your questions. [Operator Instructions] Our first question is from Nadim at SBG. This is to you, Salve. [indiscernible] Merchant Lending. [indiscernible] Merchant Lending scaled impressively. Does the product work in the same way as MFS, which relies on telco and financial partners?

Yes. Well, the answer is yes. I mean, we are creating the same ecosystem. We have financial partners as usual because we need to provide loans, and we need to have the lender on record and the overage on the regulatory side. On the distribution yes, it could work with telcos but also it could work with banking wallets in this case is first with the telco, but in the future, I would say, you will see more and more also on the banking side. The product, what it does is provide loans to the merchants, helping them to finance the working capital, allowing them to have flexibility in the way that they manage their liquidity. And what we see is that this is only the beginning of the journey because there is not real good products in the market. We are doing a big effort to try to understand the insights and to pump with a very interesting pipeline of functionalities that we will add products in the future. As I said, Ghana is the first one. Uganda is coming second, and you will see, hopefully, in the future, very rich pipeline of opportunities across the different geographies.

And my second question, please, could you expand on the FNB wallet advance opportunity? Do you see it as a substantial market opportunity? And how does it differ from other cash loans in the market?

Well, of course, I mean, we are -- we are enabling FNB, and they are the ones, of course, they need to run the channel and to acquire customers being held by us. But the answer is, yes, I believe it's going to be a very interesting product. South Africa is a different market. It's very bank from one side, but also you have a a lot of people that either don't use or nearly don't use their bank account and they do cash out very often. I believe that the opportunities in the low end of the pyramid, the opportunity will allow us to provide loans to this market that is not necessary will serve across other players. And I believe we have -- to be honest, high expectations, both FNB and as we are working together and the whole idea is to expand. I mean, the number of users in the wallet is something that needs to be unveiled by FNB, but I have to say that it's substantial.

And for this partner where overdrafts are transitioning in-house, do you expect the overdraft proposition to move in-house in other countries? How do you expect this to -- do you expect the partner to take our products in-house over time?

Well, the answer is no, at all. I mean this is something that is very specific, unique from one and single partner first. Second, it's something that has been planned for the last 2 years. They wanted to have these capabilities in house, and I have to say that we have worked and help on this transition. Now all the overdraft proposition needs are going to be internalized at all even more. And you can see that we are launching new overdraft proposition. What it is true is that it's a service that is a checkout proposition, low value in terms of the loans, very quick recovery, very low default and also very low margin or lower margin than other services on. So my answer is no. It's very specific. They want to do it. We are hoping to do that. For me, we will continue progressing with all our propositions, and we have a very interesting pipeline of overdraft services across different geographies and different partners.

A question from James, SBG. How do you think about managing default rates, particularly with new products being planned for the future?

Yes. So I think it's -- as we always keep saying, this week controlling the default. So the default is always in our hands because of our [indiscernible]. So I'm expecting the default we changed and you could always look at the default in the relation to our note take rate. So we are not changing -- we don't expect it to change any kind of the default trajectory and to still keep the default in the range of the 4x cover ratio.

And do you expect heightened defaults as you build experience in these new products?

Well, it's like the default, of course, the more what you're expecting, and we're also showing to the investors in our -- on the road show that whatever we just launched the product, initially, we have become the babysitter period over a period of time, the more kind of the good experience. We have more customers, which is repeating customers. Of course, repeating customers have a lower default. So that overall, we know more about the customers and the drives default lower. So you have a blended kind of the effect of kind of getting more experience with the lower default rate. But as we're expanding, we see the quite ambition plan of expanding, we have also the new deployments coming. So if you look at the individual deployments, we're expecting the improvement of the default. But if you look at the blended portfolio, you will -- constant.

And we've got a question from Anthony, Investec. Please, could you provide more color on the impact of the forgone overdraft business on take rate and adjusted EBITDA margin given your comment that this is a lower margin business?

I think -- well, as you can see, I mean, we do not expect an impact on the take rates in the future, also taking into account the volumes, but also the difference in between one service and the others. On the margin side, what I can tell you or I can say to the market that these 3 deployments, the contribution, the net margin contribution last year was below 4%. So the impact is not important. It's not material, and we are able to absorb. We are absorbing the impact on the profitability.

Perfect. And we've got a question from [indiscernible], Mazi. Are there any other countries where you anticipate challenges similar to those experienced with ACS in Nigeria?

Well, the answer is no, but also the answer is that everybody needs to understand that we operate in 35 countries, 35 jurisdictions, each of them absolutely different with a different regulation. Also what we need to be alert all the time for any development, any change on the regulation. One of the things that we have done during the last 9 months is to invest heavily on our compliance and regulatory team that we have expanded across Optasia. And the whole idea is to learn and to anticipate whatever situation we can find. I believe the situation of Nigeria is white quite specific, and you are not going to be repeat [indiscernible] place but I need to say that we are all the time and trying to understand what changes are happening in the regulation, anticipating what it could be. And I think that creating a huge expertise also at the time that we continue expanding on.

And the second question from Asanda, on the energy rail, do you pay the utility upfront?

So a good question. It depends on which country you're in. So for example, in 2 countries, 1 of them being Zambia, the other 1 being Zimbabwe, we've been actually awarded a super vendor contract. So in that case, as part of our go-to-market strategy is we're going to buy electricity upfront, then we would pay that to the utility company upfront. But again, it depends on each market specifically.

And the question from Harold, is the business primarily cash-based? Or do you also extend credit to debtors given the significant trade receivables back?

No, it's like -- well, it's the made receivable is also linked because we have to understand that we are a B2B2C business. So the trade receivables, which you kind of having in our balance sheet is linked with the invoices, which we are charging our partners being the bank or [indiscernible]. And of course, our product which we're helping our partner to distribute is not presented in our balance sheet.