Letshego Holdings Limited, the pan African micro lender, said it is making progress in its endevour to move into the banking arena, but said it prefers to take the transactional model rather than the conventional large operation that normally include corporate banking.
The idea is to move from the consumer lending model into a wider financial institution but without necessarily hurting the current business model.
Letshego has been successful as a lender of unsecured loans since it was established in Botswana in 1998 and managed to copy the model into other countries in the African continent.
The Botswana-domiciled outfit, which is also quoted on the BSE, made its intentions clear about diversifying its products that may include deposit taking on its annual report for 2010.
Managing Director of Letshego Holdings, Jan Claassen, said the aim is to start with a limited banking model not a bigger one that has treasury or foreign exchange offerings.
“The aim is to concentrate on a transactional banking,” Claassen said at the presentation of the group results at the GICC.
“We are in the process of rolling out banking system group wise; this is not only for Botswana operation,” he later told Sunday Standard.
The move comes at a time when Namibia is mulling a micro finance banking, while in Mozambique Claassen revealed it is easy to qualify as a micro finance bank.
It has been thought Letshego might be looking at merging with existing banks and take them to Africa, but it is understood that some deals failed as the banks were unreasonable.
“We look at acquisitions and mergers, but it must make sense and be reasonable,” Claassen said. “There are territories where we are talking to various entities.
Should Letshego seek to apply for a banking license in jurisdictions like Botswana, analysts think the Central Bank will not hesitate to issue a license because it is in a good financial footing.
The group’s assets have grown 42 percent to P2.9 billion at the end of July 2011 with advance to customers sitting at P2.6 billion.
It has cash reserves of P220 million and Claassen said they have the largest capital adequacy compared to competitors in the financial services sector.
The MD added Letshego, as a group, is well placed as far as funding is concerned.
Letshego Holdings Limited, which is listed on the BSE, is a leading provider of unsecured consumer loans and has operations in Botswana, Mozambique, Namibia, Swaziland, Tanzania, Uganda and Zambia.
It recently announced it was on the verge of acquiring a 62.52 percent stake in the issued share capital of Micro Africa Limited (MAL), a private company incorporated in Kenya.
The investment in MAL, which will be done slowly, will allow Letshego to enter the Kenya, Rwanda and Ugandan markets.
