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Letshego registers positive half year results

Publishing Date : 11 September, 2017


Letshego Holdings Limited, Africa‘s largest micro financing entity has registered a significant growth at half financial year. According to the Group‘s financial performance released on Friday last week reflecting results for the half year ended 30th June 2017, the Group‘s total assets rose to 8.7 billion from 7.3 billion pula  in 2016.

The group’s financial results also indicate that Letshego accumulated profit before tax of P498million, a 2 percent increase compared to 489 million registered in 2016 at half year. In addition, the group also registered a 15% to the 1.2 billion pula of total revenues registered in 2016 at half year.

Interest income increased by 14% to P1, 112,293 against a lesser performance of P952, 284 as of June last year .Letshego, which operates in more than 10 countries continues to grow as it recorded return on average equity of 18% compared to 16% last year by end of June as well as a return on average assets of 9% which did not move compared to that of 2016. Letshego also reports that total shareholders’ equity increased by 3% to P4.2billion against P4.1 billion of 2016 half year.

Letshego Group Managing director, Chris Low  asserted that the company’s positive loan growth will continue to benefit from their increasing diversification into savings solutions, with successful pilot launches in Tanzania and Nigeria’s education and housing sectors. “Our award-winning agency model currently being rolled out in Mozambique is evidence of our commitment to extending our reach into the most rural areas,” he said.

Early this year Letshego acquired east African micro-lender Afb Ghana in March. The March 2017 transaction continued Letshego‘s Pan African quest, making the Ghana entrance its 11th country of operation. Already the Ghana acquisition is contributing significantly to the Group’s positive financial performance. “Ghana features for the first time in these half year results, following the Group’s 100% acquisition of Afb Ghana, effective in March 2017. The Group’s strategic agenda to build Africa’s leading inclusive finance group is underpinned by embedding future capability with investment in people and systems to enhance customer experience,” reads the Group’s half year financial results statement.

According to Low, strategic partnerships remain an important catalyst to achieving expansion ambitions within “all of our markets”. “In Rwanda and Ghana, for example, we have partnered with a fintech business and local mobile operators to pilot projects which stand to reach many thousands of new customers,” he revealed. The Group MD also added that home improvement and affordable housing now constitutes 5% of the company‘s total loan portfolio, “a percentage we aim to raise in the medium to long term,” he said.

Letshego Group’s consumer lending segment is 88% of the overall loan portfolio with MSE (micro and small entrepreneurs) at 12%. Loans and advances to customers are up 19% in BWP terms year-on-year (14% excluding Ghana), supported by stable interest margins and cost of funding. The group’s loan book remains at targeted levels with the exception of Rwanda, where the Group has taken additional provisions on a specific segment of the loan portfolio.

Customer deposits grew marginally, however the impact of Letshego customer savings solutions is only expected to reflect in subsequent reporting periods. Letshego introduced new funding lines resulting in a 45% increase in borrowings, and a strong funding pipeline is in place to support the business growth going forward. Letshego Holdings Namibia Limited (LHN) has achieved another significant milestone for the Group by securing regulatory approval for its inclusive Initial Public Offering (“IPO”), on the Namibian Stock Exchange (NSX). Letshego Namibia will be the first primary listing by a local company on the Namibian Stock Exchange in four years.

Letshego Holdings Limited was incorporated in 1998 and is headquartered in Gaborone and has been publicly listed on the Botswana Stock Exchange since 2002. Today it is one of Botswana’s largest indigenous groups, with a market capitalization in excess of USD500 million, placing it in the top 50 listed sub-Sahara African companies (ex-South Africa), and with an agenda focused on inclusive finance. Through its eleven country presence across Southern, East and West Africa (Botswana, Ghana, Kenya, Lesotho, Mozambique, Namibia, Nigeria, Rwanda, Swaziland, Tanzania and Uganda), its subsidiaries provide simple and appropriate consumer, microfinance and savings solutions to the financially underserved.  Since listing on the BSE the group has raised P646 million from the shareholders while returning P1.9 billion by way of dividends.



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