The awarding of a provisional banking license to Letsheho Holdings has been hailed as a new beginning for the group that will greatly boost its strategic ambitions to become a leading financial services house in the continent.
The Botswana Stock Exchange (BSE) listed company said it will achieve its strategic ambition through broadening the range of products and services that it provides to meet its customer needs. This would include building deposit taking capabilities in key markets, diversifying into microfinance lending and enhancing unsecured consumer offerings.
The pan African consumer lender said last week that the Central Bank of
Namibia granted its subsidiary, Letshego Financial Services Namibia (PTY) Limited (LFSN), a provisional banking license on 15th July 2014.
However, the provisional license is subject to the fulfilment of certain conditions within a six month period before any new operations can commence.
Letshego entered the Namibian market after the group bought all the
shares of Edu-Loan (Namibia), a registered Namibian company since
1997. The subsidiary is registered as a micro-lending company, regulated by the Usury Act (Act 73 of 1968) and supervised by the Namibian Financial Institutions Authority (NAMFISA).
“The issue of this provisional license is a key milestone in Letshego’s transformational journey and will enable the group to meet its commitment to improving lives and financial inclusion in Namibia. This is the third deposit-taking micro financial license obtained across the group’s ten country footprint in Southern and East Africa,” said Letshego in a statement.
The move means Namibia has moved ahead of Botswana, where the company originates, following the rejection of banking license by Linah Mohohlo’s Bank of Botswana. The group has a stronghold in diamond rich Botswana, where it has a 21 percent penetration of government employees and a loan book of P1.8 billion or 42 percent of the group’s loan book. The group has a footprint in Southern and East Africa, in Botswana, Kenya, Lesotho, Mozambique, Namibia, Rwanda, South Sudan, Swaziland, Tanzania and Uganda. The group is the second largest quoted company in the BSE with a market capitalization in excess of US$550 million. It also employs over 1300 staff representing more than 20 nationalities. It has over 250 customer access points across its footprint, servicing a client base of more than 250 000.
The company said over the last 15 years, it has positioned itself to
assist governments with their financial deepening and financial
inclusion agendas and it offers unsecured loans between US$1,000 and
US$40,000 that are appropriate to its client’s every day needs, mainly
through the deduction at source payroll model.
Its product range diversity was increased in 2012 through the acquisition of Micro Africa Limited in East Africa – today it provides
loans to micro and small enterprises (MSE), to groups as well as to
the low income segment. Letshego believes that its products must be
simple to understand, affordable and inclusive.