Letshego Holdings Group of Companies, the pan-African listed consumer lender, says its major competition in Botswana is with commercial banks for retail unsecured lending.
Letshego Managing Director Chris Low on Friday said that customer access points increased from 11 to 12, servicing 32,000 customers, supported by 103 full time employees and 100 direct sales agents adding that net advances just under P 2 billion, with PBT up 20 percent to P 215 million.
“We have entered the mining sector as an adjacent customer segment in our Botswana portfolio. Housing microfinance has commenced in partnership with a large construction supplies group,” said Low.
He said the group remains committed to strong performance, growth and returns and that the transformation strategy continues to focus on growing the core payroll business.
He stated that their focus area is diversifying into adjacent segments with innovative consumer and micro lending products and also building technical assistance and other strategic partnerships.
He added that they will also focus on diversifying their funding base and improve gearing.
Listed on the Botswana Stock Exchange (BSE) Letshego’s unaudited financial results for the six month period ended 31st July 2014 balance sheet indicate that advances to customers increased by 31 percent to P5.0 billion raising from P3.8 billion in 2013. Its cash available for operations is P383 million but in 2013 was at P433 million.
However, the group’s return on assets reduced to 14 percent compared to 2013 when it was at 18 percent.
A close look at the income statement shows that its profit before tax increased by 11 percent to P508 million while in 2013 it amounted to P460 million and also the cost to income ratio remained unchanged at 28 percent as well as in 2013. There has been a higher tax charge resulted in profit after tax increasing by 3 percent and the earnings per share increased by 1 percent.
“We will continue to invest in building capabilities to enhance our sustainable competitive advantages. Effective balance sheet, risk and cost management remain key to our operating model,” he said.
Letshego MD stated that as a group, they are committed to financial inclusion, financial deepening and economic and social governance principles. He added that Letshego group of the future will offer simple, appropriate and inclusive products; flexible and convenient access; responsive and ethical credit; and support for the MSE owner to build his or her business and all at a very low cost.
Low noted that the Namibia granted a provisional banking licence July 2014 and also housing microfinance in Kenya picking up. He added that options to exit South Sudan are being explored and the sale of minor stake in Tanzanian MF business, Tujijenge, is in progress.
Low said off a lower base, there was good growth recorded in Kenya, Lesotho and Rwanda, adding that all markets remain competitive and the Group has been able to maintain or grow its market share.