Letshego Holdings, the titan of micro finance in the southern African region, said the fume still holds steady in its champagne glasses as profits for the year are up 25 percent thanks to the robust Botswana market.
The Botswana Stock Exchange-listed company emerged in an excellent position in the 12 months to January 31, 2011 and painted a rosy picture for the current fiscal period.
Net interest income shot up 26 percent to P 679 million and profit for the year stood at P 473 million. The loan book strengthened 37 percent to P2.3 billion and assets increased 27 percent to P 2.4 billion, it said in its financial reporting.
“Given prevailing economic conditions, the directors expect continued growth in the loan book during the financial year to 2012 and continued profitability,” the company said.
Letshego operates in Botswana, Mozambique, Namibia, Swaziland, Tanzania, Uganda and Zambia. It said all operations did well in exception of Zambia.
“Botswana remains a significant market for Letshego at 67 percent the period end advance book and 66 percent of the group’s profit before tax,” it said.
However, it indicated that operations outside of Botswana continue to gain critical mass and contributed P 195 .5 million on group’s profit before tax.
“The overall performance of regional operations has been excellent with the exception of Zambia,” it added.
One of the interesting aspects is the company’s ability to reduce the level of impairment by as much as 22 percent, despite the challenging economic environment across the region. The move was motivated by the fact that, unlike in the developed countries, regional economies did not embark on retrenchment exercises and its ability to be given a government deduction code.
Government deduction code is vital to the survival of the company as most of its customers are civil servants and that enables it to get money at source.
In its financial reporting it also indicated that it is aggressively scouting for some expansion moves into some new territories across the African continent while at the same time it is looking for funding opportunities to bolster its standing.
Letshego has been mulling on plans of opening up in Ghana, which will be used as a stepping stone into the western African region, which is a very lucrative market because of its population size.
One of the key things in the current fiscal year will be the rolling out of its technology into all operations in a bid to enhance productivity and cutting down of costs.
In Uganda, it sold 15 percent stake of its operation to a group of citizens. This is in line with its policy of economic empowerment. The 15 percent stake is worth P 2.5 million and will be settled by a loan that will be provided by Letshego Holdings.
The company has decided to pay its shareholders’ dividends by shares instead of cash. The shares are valued at P 250 million. Letshego closed the week Friday 1 thebe up to 185 thebe.