When the home grown Pan African financial services Group applied to the Bank of Botswana to undertake strictly deposit taking activities, their application was rejected on grounds that the licensing regulation did not accommodate such a requirement. The group, which has consumer, micro lending and deposit-taking subsidiaries across sub-Saharan Africa explained at the time that what it sought to establish did not require a full commercial license as it was hinged on deposit taking.
Letshego has tested and proven the business model in countries such as Mozambique and Rwanda and just a few weeks ago Namibia also became party to this initiative. Letshego announced on the Botswana Stock Exchange last week Friday its successful application and approval of its fifth deposit taking licence in Namibia. Following the initial failed application to BoB, Letshego has not tendered in a re-application which is indicative that the local licensing environment remains hostile to the deposit taking initiative that the company has successfully replicated five times in other countries where it operates.
“The approval to commence banking operations for Letshego Namibia, granted by the Bank of Namibia, will allow the company to expand its range of simple, appropriate and affordable solutions. Further, deposit-taking capability will enable Letshego Namibia to broaden its inclusive finance agenda to target the under-banked and under-served in the informal sector using service delivery platforms that allow access anytime, anywhere,” reads part of the statement from Letshego.
This is the same intent which Lesthego advanced when it applied for a banking license in Botswana – a country where a significant number of people remain unbanked. On being granted a full commercial banking licence in Namibia, Letshego Chief Financial Officer Chris Low is quoted as saying “this is an exciting moment for Letshego and confirms our commitment to deepening financial inclusion across the continent. We are dedicated to providing accessible financial services to those that are under-served by traditional banks – obtaining a banking licence in Namibia means we can expand our services to those that need it most, helping bring to life the aspirations of the Namibian public.”
Since the Central Bank was established 40 years ago, Botswana is yet to have its own commercial home grown bank. Pundits have on numerous occasions elucidated that the regulatory environment is rigid in its requirements. Critics have also said that a review of the licensing structure will propel efforts to drive financial inclusion in the country. Although the BoB remains steadfast in drawing in populations outside the banking system, its initiatives remain lukewarm in their impact.
The successful application according to Letshego follows the granting of a provisional banking licence in July 2014. The provisional license was subject to the fulfillment of certain conditions within a six month period before any new operations could commence.
“Our strategy will continue to focus on leading the development and provision of inclusive finance that encompasses broad based financial services. We actively look to align with the Government’s agenda for sustainable socio-economic development and to this end, we are committed to supporting the National Harambee Prosperity Plan,” cites Ester Kali, CEO of Letshego Bank Namibia as quoted in the press statement.