The revenue growth of 27% compared to quarter 4 2022 and 9% from quarter 3, 2023 is further evidence of the progress we’ve made. Given that, this growth is being achieved off a greatly reduced cost base, as well as in a difficult operating environment, it clearly demonstrates that the actions that we have taken are already yielding robust results. With the cost optimization lever effectively complete, we have more predictability and consistency in our numbers. We are now focused on revenue increases through EPE account growth and cross-sell initiatives. We should also see widening jaws every quarter as we grow off the stable cost base. We close the 2023 financial year with an active EPE account base of 1.3 million customers, representing 10% growth on a net basis.
Approximately 85% or 1.1 million are our core permanent grant recipients. Growth in this cohort has been 2% on a net basis for the year, which has been slower than expected and the primary reason for the consumer division falling short of EBITDA guidance. In unpacking our net EPE account growth, it is worth noting that the gross EPE account activations for the permanent base showed significant improvement in the fourth quarter, evidencing progress on the ground stemming from the various strategic initiatives to lift our growth rate. We achieved approximately 60,000 gross account activations in the fourth quarter, compared to approximately 38,000 in the third quarter of financial year 2023. The net EPE account growth result was impacted by a higher than normal churn in the fourth quarter that related to routine closure of approximately 60,000 dormant accounts.
Adjusting for this, the permanent account base showed an 8% increase in 2023. Customer churn is a major focus in our business, and our churn rate remains in line with the natural attrition in South Africa’s grant beneficiary market, which is largely attributable to children turning 18 and mortality. Churn averages around 10% to 12% per annum in the overall grant beneficiary market. Growing our permanent grant recipient account base is a strategic priority for our leadership and sales teams. We have several initiatives to lift our growth rate in financial year 2024, including increased marketing initiatives and budget, investments in our sales force with incentives focused on active account-based growth, improved on-boarding systems, reducing friction on activations, customer incentives to promote switching, branch renewal and repositioning to enhance customer experience and convenience, and continued engagement with SASSA and support of their programs.
Encouragingly, we’ve started this financial year with some very robust EPE account opening numbers, including a number of record days being achieved. We anticipate our internal initiatives, current support difficulties and the SASSA Outreach program to support this momentum through financial year 2024. In our EasyPay loan business, we’ve seen a continued improvement in our uptake of our account holders as we offer a distinct product from most competitors. We tailor our loan structure and repayment terms to the grant recipients with a maximum value of ZAR 2,000 repayable over up to six months. Our simple terms and conditions, repayment profiles, and no interest charges are easy for our customers to understand. This credit product is best in market and offers significantly cheaper costs than those prescribed under the National Credit Act.
Our customers highly value these loans, as demonstrated by the low loss ratio and high percentage of borrowers regularly renewing their loans. With our loan book turning over at least every six months, we get real insights into our customers’ borrowing patterns and default rates, allowing us to continue providing real value to our customers and managing our risk. We continue to improve customer experience with the recent addition of USSD and Voice branch channels, where customers can complete loan applications with instant approval online without visiting a branch USSD facilitates transaction functionality on feature phones, which are already used by our customer base, given that they do not have a smartphone. Our EasyPay micro-insurance policies have continued to exceed our expectations, with our account base penetration now at 30% compared to 20% just 12 months ago.
Upskilling our sales force to improve their cross-selling capabilities and upgraded technology platforms have delivered significant benefits, with 124,700 new policies being written in financial year 2023 compared to 27,600 in financial year 2022, an impressive 450% increase. The book’s quality remains excellent, with a premium collection ratio of approximately 96% compared to an industry average at this end of the market of 60%. Our insurance product success and loan performance improvement has resulted in an ARPU for our regular grant customers of approximately ZAR 80 per month in financial year 2023 quarter 4 compared to ZAR 70 per month 12 months ago. In conclusion, we see the trend of continual improvement extending through 2024 and beyond.
The improvements to our products, distribution and technology are bearing fruit, and we are all well-placed to quickly and sustainably expand our market share of the grant market in South Africa. For my colleagues and I in the Consumer Division, financial year 2023 has been nothing short of an amazing year. Whilst the EBITDA performance has been remarkable, it is hugely rewarding and motivating to see how our customers are returning to us and switching from the South African post office, setting the tone for growth into financial year 2024. With the momentum built this year and the enthusiasm with which our people are taking on the challenge, I’m excited about the prospect for the Consumer Division over the next few years. I would like to hand over to Naeem now, who will take you through the income statement and balance sheet in more detail.
Naeem Kola: Thank you, Lincoln. As Chris said, it has been a year of great achievements. We have delivered against what we set out just 12 months ago. As my colleagues discussed earlier, we exceeded our revenue and met our EBITDA guidance for the year. Given the challenging trading environment, turnaround and restructure in the consumer division, and the integration process as well as the high growth from Kazang and Connect, overall, a robust performance.As a reminder, the Lesaka is a domestic filer in the United States. We report our results in U.S. dollars under the U.S. GAAP. However, our operational currency is South African rand, and as such, we analyze our performance in South African rand. In this presentation, we will discuss our results in South African rand, which is non-GAAP.
This assists investors’ understanding of the underlying trends in our business. As you know, our results can be significantly affected by the currency fluctuations between the U.S. dollar and the South African rand. Amounts reflected in South African rand in this presentation are calculated by translating U.S. dollar amounts reported using the applicable U.S. dollar ZAR exchange rate. We use average quarterly exchange rates to convert our quarterly performance presented from U.S. dollar to ZAR, and an annual average exchange rate to convert our annual amounts presented. As a result, the sum of our quarterly amounts presented in ZAR may not agree to the annual amount presented in ZAR. Q4 2023 includes pre-existing the Lesaka and Connect Group for the full quarter, as was the case for Q3 2023.
However, Q4 2022 only includes the Connect Group results from 14 April to 30 June 2022. Thus, the Q4 2023 versus the Q4 2022 comparison is not an exact like-for-like comparison. From our next quarter results, all comparisons will be like-for-like, and the slide explanation will no longer be necessary. Looking at the Group Income Statement for the quarter, we reported a consolidated Group Revenue of ZAR 2.5 billion for the fourth quarter, up 32% compared to Q4 FY ’22. However, if adjusting FY ’22 Q4 to include Connect revenues for the full comparative quarter, revenues are up 18% compared to Q4 FY ’22. In U.S. dollars, reported consolidated Group Revenue was $133 million for the quarter, up 9% compared to $122 million in Q4 2022, which is reflective of the 20% weakness in the ZAR against the U.S. dollar over the period.
The significant financial turnaround is demonstrated by a narrowing of the operating loss to ZAR 124 million, including a non-cash impairment charge related to pre-existing merchant business of ZAR 132 million. The ZAR 132 million impairment loss reported in the fourth quarter relates to our UEPS business, being our terminal distribution business. It is important to note that, this impairment has no cash flow impact on Lesaka. Further, the UEPS business is not a material contributor to our overall merchant business. Depreciation and amortization of ZAR 109 million for Q4 2023 includes ZAR 67 million related to amortization of acquired intangibles. As a reminder, acquired asset amortization reflects the accounting treatment for acquired assets, which is both non-operational and a non-cash accounting charge.
