Letshego Holdings, Botswana’s first ever Pan micro provident outfit, pledged support for the new non-banking regulations as it celebrates another milestone performance in the last six months that were largely driven by Botswana operations.
In the six months to end of July this year, turnover ballooned by 66 percent like-for-like to P 277, 400 million that was driven by pentÔÇôup household demand in a recessionary year.
Advances to customers surged by 48 percent to P 1.5 billion as interest rate insensitive customers, largely being civil servants, remained clued to company.
In its move, aimed at contemptuously defying the recession, profit before tax was up 65 percent to P 212 million that was backed by a similar growth margin in attributable profits that edged up to P 159 million.
“In Botswana, the non banking financial institution regulatory authority (NIFRA), following the discussions with the industry issued a draft rules and regulations for the industry.
Letshego has provided feedback to NIFRA on these rules and guidelines and we do not expect any significant implication for the business in Botswana,” the company said in a statement.
Further, the company praised the move by NIFRA, adding that it hopes the regulation would be introduced in other countries where it operates. Letshego operates in Botswana, Namibia, Swaziland, Tanzania and Zambia and has plans to enter Ghana in the near future.
“In the territories where the Group operates, it is evident that there will be an introduction of regulation or more enforcement of regulation in the industry over time. This is good for customers, their employers and the industry.
“Letshego will continue to fully support these initiatives and is well positioned in this regard,” the company added.
NIFRA, a regulatory body aimed at bringing some order to the non financial banking sector came about as most of the micro and loan shark customers were being charged high fees and, at the same time, their bank and identity cards were impounded by the company upon being given loans.
The structure of the loan shark loans are such that customers are hooked into the scheme indefinitely and totally lose integrity and valuable cards.
However, the proposed regulatory frame work has been met with stiff resistance from the loan shark companies’ operators who claim that the new initiatives put them at risk of being faced with a floodgate of defaulters as the rules forbid them to impound valuable documents such as bank and identity cards.
Letshego Holdings has registered some interesting developments in the last two years ÔÇö that coincided with the company’s tenth anniversary.
This involves the starting of operations outside Botswana, capital raising and the off-loading of other operations, such as Legal Guard Insurance in a bid to streamline the company.
In a statement to the end of July 2009, the company further said it remains unblushingly committed to its Pan African expansion ambition in its strategic move but warned investors of cost implications associated with that since it would involve non organic exercises.
“New start up operations and targeted acquisitions continue to be explored by the Group. This is in line with the next phase of pan African expansion strategy,” the company said, adding that its current debt to equity ratio stands at 40 percent.