Kutlo Motseta
29th August 2024
Letshego Holdings which operates in 11 markets across Africa, delivered positive interim financial results after posting considerable losses in the previous financial year.
Interest income year on year(YoY) rose to BWP1.87 billion from BWP1.57 billion in 2023. Operating income also rose yoy to BWP1.34 billion from BWP1.1 billion in 2023.
Group Chairman, Aupa Monyatsi, reported that its results had improved since last year despite a 31% decline in Profit before tax yoy of BWP186 million from BWP269 million in the previous financial year.
Group Chairman, Aupa Monyatsi, cut a more optimistic note reporting that its results had improved since last year. He said the company was challenged by the volatile markets. It suffered a huge loss last year but still managed to turn its fortunes around.
“Responsibility comes with a lot of volatility … as persist in different markets Ghana, Kenya, and Nigeria … this puts pressure on disposable income of consumers. These hyperinflation affects the capacity of consumers to spend and their ability to repay loans,” he said.
He further said that when consumers have to decide whether to repay a loan or put food on the table, they will naturally do the latter. He added that the company had focused energy on its legal team to address issues of debt collection and recovery.
He said that the company had also diversified its portfolio, cross selling in other areas such as insurance products and mobile lending and hoped to replicate its successes in Ghana in other markets. It also benefitted from an improved performance of other offices in the region.
Namibia’s operating income has increased 9% year on year, supported by upward interest income of 22% compared to the same period last year.
Mozambique also posted strong performance with 13% increase in loan book growth to BWP2.7 billion from BWP2.4 billion and 27% growth in interest income year on year.
“Mobile lending played a significant role in the company’s results, especially in East Africa. Mobile providing the model in East and West Africa, which is remarkable in a depressed microlending environment”.
The company won five awards in best loan, most innovative, promoting financial inclusivity categories.
He said, mobile lending was successful because it provides remote technological financial accessibility to consumers. “In rural areas where there are no banks consumers can apply and pay for loans without walking into the banks”, he said.
Highlighting the success of this business strategy, he said, “you will struggle to find a business model with 562% revenue growth (P278 million)”.
Gwen Muteiwa, Group Chief Financial Officer, said though the company is doing well in the lending business and customers deposits they were up by 30%. She said it was still recovering from last year’s financial hit but the company was able to grow buffers that enabled it to lend money to customers.
She said the company’s operating expenses had grown which grew its balance sheet and recoveries by 37%.
“We are still improving but are not yet where we want to be.”
The company did not declare a dividend as it still wants to reinvest its money to grow the results for financial year. Monyatsi reassured stakeholders that artificial intelligence did not necessarily have an adverse effect on the job security of its employees.
“We have a people agenda … we have invested in our staff through world leading online academies [to learn about e-business] … We spent tens of millions in the reduction of staff. Some voluntarily took packages to pursue other interests and started businesses.” He said that IT has also provided new employment opportunities as IT requires specialized staff.
