Continued innovation and market penetration during FY 2023 have seen a year-on-year growth in our book of 38% and 62% in credit disbursements. In FY ’23, we extended over $1 billion in credit to our merchant customers, delivering the funds within 24 hours, demonstrating the utility and value our Cash Vault and our Kazang Pay customers receive from our offering. By many accounts, we are at or near the top of the interest rate cycle and recent inflation data shows an encouraging downward trend. As such, we anticipate a more favorable operating and trading environment for our merchants and thus a resumption of growth in our credit business. Our cash vaults or cash digitization business put in a pleasing performance despite being primarily exposed to the formal SME market, which load shedding, interest rates and consumer pressures have impacted more severely.
We saw an 8% year-on-year increase in throughput on our vaults, and the number of cash vaults increased similarly by 8% year-on-year. Over $300 million in cash is deposited into our vaults on a busy trading day, and is immediately available to our merchants in the form of working capital. We effectively put the bank in our merchants’ store and significantly enhance their risk profile and operating efficiencies. As we extend this solution into the informal market, we anticipate making a real difference in our merchants’ lives, entrenching our ability to enable them to compete and grow. Our EasyPay Enterprise Market Solution, which offers VAS, switching and bill payments in the formal market through retail partners, has been under pressure this year.
Whilst this solution is relatively small in terms of profit in the overall merchant business, it is strategically important and a growth opportunity. We are investing in its development in order to unlock what we believe is an exciting future. Overall, it has been a challenging environment with significant headwinds, but we are encouraged that the underlying growth and profitability trends remain intact. We currently have some exciting innovations in our development cycle. In this Fintech enabled environment, innovation and agility are critical to long-term success. We are in the fortunate position to have the financial strength, skill and a large installed client base across which we can continue to drive innovation and enhance our market positioning.
Considering the challenging economic environment and the impact of increased load shedding on our merchants and their customers, the Merchant Division delivered a good fourth quarter result and excellent year-on-year revenue growth. As both Chris and I have mentioned, the Connect and Kazang businesses continue to outperform their acquisition base case, although they are growing at different rates. I am encouraged by the result for the fourth quarter. Despite facing numerous challenges, we still managed to grow. Notwithstanding the tightening credit cycle, VAS product mix changes, significantly increased load shedding disrupting our sales efforts, and continued pressure on our merchants’ customers, the Merchant Division still reported 2% growth in revenue compared to Q3.
On an annual basis, growth was 17%, but within that, the Connect Group revenues grew by more than 25% for the year. From an EBITDA perspective, Q4 grew 4% on Q3 2023 to $154 million, negatively impacted by our pre-existing merchant division. In conclusion, it has been an excellent year for the Merchant Division. We have successfully integrated the Kazang and the Connect operations into Lesaka and continued on our strong growth trajectory with our value proposition to informal and formal merchants resulting in deeper, stickier relationships that will continue to underpin the overall growth rate of the business going forward. We are excited about the overall growth opportunity that lies before us as we continue to focus on our merchants’ ability to compete and grow.
I’d like to hand over to Lincoln to take you through the Consumer Division results and strategy.
Lincoln Mali: Good morning and afternoon, everyone. Thank you, Steve. I want to contextualize our consumer situation. As you know, we focus on the social grant beneficiaries in South Africa. Their monthly expenditures have been subject to high inflation, in many cases ahead of reported inflation figures. Our customers often rely on just one grant to cover monthly essentials to keep their households going and feed their families. As the only financial institution focused exclusively on this end of the market, we dedicate 100% of our resources to understanding and servicing their needs as effectively as possible through product design, fit-for-purpose distribution network, and service channels. This focus has led to our making significant strides in the execution of our strategy.
Financial year 2023 and quarter 4 have been a story of continued improvement for the consumer division. After breaking even on an adjusted EBITDA basis in the second quarter, we have recorded three consecutive quarters of increasing profitability. Quarter 4 segment adjusted EBITDA was ZAR 46 million, up from ZAR 30 million in quarter 3. For financial year 2023, we reported a segment adjusted EBITDA of ZAR 59 million compared to a loss of ZAR 329 million in financial year 2022. This swing of almost ZAR 400 million in EBITDA in one year was an incredible challenge for us, and I’m immensely proud of what the consumer team has achieved. As a positive contributor to the group, I’m confident we can take this momentum into financial year 2024, which has started with encouraging results.
