Botswana Stock Exchange (BSE) listed Letshego Holdings plans further investment in people and systems in 2017, as the micro lender continues with progress of its strategic agenda to become Africa’s leading inclusive finance group.
The group has strengthened its operating platform, with Letshego Mozambique, Rwanda, Kenya and Tanzania now live with USSD mobile financial solutions. Additional customer solutions in partnership with local mobile operators are planned for 2017.
Letshego’s operating model focuses increasingly on technological capability to provide access; also, the enhancement of existing products to ensure sustained market relevance continues while solutions for micro and small enterprises, agri-business, affordable housing and education have been piloted in East Africa.
In the year ended December 2016, the group reported a nine percent increase in total revenues to P2.2 billion, a 13% increase in net interest income to P1.6 billion and a six percent increase in net loans and advances to customers to P6.7 billion.
Franchise growth and the new funding lines introduced during 2016 brought the group Debt to Equity ratio to 85%, up from 66% in 2015.
This is aligned with the strategic objective of optimising the group’s balance sheet. Further, the Group’s Ba3 Moody’s credit rating remained unchanged during the year, and the share buy-back mandate, which was exercised during 2016 on the back of a strong funding pipeline, will be presented at the upcoming annual general meeting for extension, albeit with amendments.
“During the year under review, we successfully refinanced all our key funding lines, demonstrating the confidence that the market continues to have in Letshego.
Also our refreshed brand was launched across 10 markets, with the acquisitions of Advans Bank Tanzania (now Letshego Bank Tanzania) and FBN MFB in Nigeria (now Letshego MFB) being integrated into the Group.
Our overall advances portfolio growth of six percent was underpinned by strong growth in our core (deduction at source) business – with Namibia and Tanzania growing by over 20%, Lesotho and Swaziland by over 55% and Botswana by four percent in a competitive landscape,” said group managing director, Chris Low.
“We finalised our Namibian banking licence in July, and expanded our agency network in Tanzania. We continue to seek deposit-taking licences to facilitate our financial inclusion agenda and we finalised the acquisition of AFB Ghana, bringing the number of deposit taking businesses to six,” he added.
Key highlights for the year ended December 31, 2016 include P2.5 billion disbursed in new or “top-up” loans while profit before tax was P948 million, a reduction of nine percent from the corresponding period.
“The group has achieved a number of key milestones in its transformation agenda towards creating Africa’s leading inclusive finance group.
We continue to invest in expanding our African footprint and technology delivery platforms,” Low said. “Despite a difficult operating environment, we have delivered modest growth in loans and advances.
The Board is confident that the Letshego Group is well positioned to benefit from the growing markets in which we are active; further, we view inorganic expansion via acquisitions as important to the acceleration of our strategy. As such, we will continue to seek and review options for the Group to pursue.”