Tuesday, October 19, 2021

Mozambique pushes up Letshego’s loan book

Letshego Holdings, the panÔÇôAfrican consumer lending outfit, praised its Mozambique operations for its super┬ágrowth as the organisation shrugged off the effects of the global economic crisis, it announced in its full year results.

“Mozambique’s growth was at 150 percent and it was helped by the stable Tanzania and Uganda,” Chief Financial Officer, Colm Patterson, said in an exclusive interview.

The  company profits  after tax  jumped up by 14 percent to P 659 million and advances  and loan book bulged by 10 percent to P 3.3 billion.

Although Letshego Holdings┬áoperates in 11 African┬ácountries, 60 percent of its profits comes from BotswanaÔÇöits originating country. However, the loan book for both Botswana and Swaziland┬áwere bit jaded given the status of their economies and government plans.

“We took a deliberate plan of being conservative (with consumer lending) in the two markets. In Botswana we took that decision after the Minister of Finance announced in 2012 that they are going to reduce the number of employees by five percent every year in the next┬áthree years,”┬áPatterson said.

Swaziland’s economy is battered and it is faced with cash constrains as its maverick King Mswati refuses to democratise the political space. Donor agencies and regional governments are not interested in propping up his undemocratic regime.

Patterson indicated that his company is fast tracking its plans to diversify risk from Botswana, which will see more profits coming outside the country.

“This is not something that will happen overnight and we will be doing that on a phase approach,” he said.

As part of the plan, the company has set aside P 800 million geared towards its forays into the African continent. The company is actively looking at Ghana, Nigeria and Zimbabwe as potential new markets.

The company has the flexibility to tap into its Mid Term Note valued at P 2.5 billion that is listed both on the Botswana Stock Exchange and the Johannesburg Stock Exchange. It has used only P 700 million of the note.

He added: “We have┬áto prioritise┬áand our main challenge is to deploy that cash.”

He is also upbeat about its new acquired territories such as Lesotho and the Micro Africa Limited (MAL), countries which are Kenya, Uganda, Rwanda and South Sudan.

“In Rwanda there┬áare good business opportunities there. And there are plans to apply for a banking licence there,” he said.
“Looking at Africa, excluding South Africa, South Sudan is a place to be there. There is an upside in the South Sudan deal and recent events are very positive,” he added.

South Sudan has started to pump its oil after they signed an agreement with their northern neighbour, Sudan.

Letshego Holdings had a 62.5 percent┬áshareholdings in MALÔÇöacquired at US $ 3.3 million (P27.3 million) ÔÇô and recently it acquired all the outstanding shares at US $ 1.9 million.

The┬áMAL, which is currently being re-branded across the Eastern African region┬áinto┬áLetshego, contributed P 6.7 million to the profit before tax. MAL Kenya, which is domiciled in Eastern Africa’s┬ápowerhouse has been branded into Letshego Kenya.

Letshego Holdings has a commercial banking licence in Mozambique and has applied for licences in Botswana, Namibia and Swaziland.  Both Namibia and Swaziland are at an advanced stage while in Botswana is expected to take longer.

The company declared dividend of 4 thebe per share.

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