Monday, August 8, 2022

Letshego explores new business opportunities in Africa

Botswana’s micro lending company Letshego, has produced satisfactory performance during the interim period under the financial review with the Group’s total interest earning assets remaining the largest component of total assets at 97 percent of P3.55 billion, higher than last year’s value of P2.94 billion.

Letshego recorded an increase in advances to customers by 21 percent to P3.14 billion while in 2011 it was P2.60 billion. The company’s profits before tax increased 24 percent to P427.14 million from P343.45 million in 2011.

Letshego Group Managing Director, Jan Claassen, pointed out that the cost to income ratio remains at 24 percent.

He added that 39 percent of profits before tax has been generated outside of Botswana of which it was 35 percent last year. Claassen revealed that Micro Africa Limited transaction is also completed and contributed P1.87 million to profit before tax for the two months since acquisition. He added that dividend declared of 25 percent of profit after tax of P84 million.

“The group continues to explore the most effective methods of funding for the group,” said Claassen.

He also further pointed out that Letshego and Sanlam Emerging Markets have entered into discussions regarding initiatives, which, if successful, could result in SEM supporting some of Letshego Group’s funding opportunities. He stated that also MTN programme is now listed on the BSE (BWP 2.5 billion) and JSE (ZAR 2.5 billion).

“Operations in Lesotho commenced on 17 September 2012 pursuant to the grant of a deduction code to Letshego Financial Services Lesotho,” he said.

Claassen is optimistic that the Group will continue to actively explore new regions in Africa, new business streams, both through acquisitive and “green fields” methods. He added that prospects outside of Botswana remain good.

He further stated that the Group will continue to take a cautious approach to the market in Botswana as previously communicated to shareholders.

“Applications for banking and or deposit-taking licenses are underway in certain territories within the Group,” said Claassen.

He said that Letshego Botswana insures all loans against mortality and disability risks and are underwritten by Botswana Life Insurance. He pointed out that in Namibia, Swaziland and Mozambique there is a comprehensive insurance policy in place which covers mortality, disability and all events of loan default and it is mandatory for all loans taken.

“It is expected that this comprehensive insurance policy be rolled out in Uganda and Zambia in the short term and Tanzania over time,” he said.

Letshego Holding Group Chief Financial Officer, Colm Patterson, pointed out that the concept of the central registry is to consolidate all third party government payroll deductions under one deduction code, which is sent to the Government payroll centres. He added that the results of single collection body is a variety of benefits, including ensuring minimum take home rules are adhered to, efficiency, standardized operating model as well as industry sustainability.
He also stated that although the Group is currently using deduction at source, measures have been put in place for alternative deduction methodology to be used if necessary. He said that the Group has put alternative deduction option in place.

“We aim to be leading consumer finance provider on African continent and to transform into a broader financial institution as well as proven management ability to penetrate into new growth markets,” said Patterson.

He revealed that acquisition of Micro Africa Limited added Kenya, South Sudan and Rwanda as new countries. He pointed out that other expansion opportunities are Ghana, Zimbabwe and Nigeria.


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