28 May 2018
One of Botswana’s indigenously home grown businesses Letshego Holdings Limited, this week announced a watershed investment deal that saw the company secure over 250 million pula in specialist funding, the funds, according to a press statement from the fast growing financial group, will be used predominantly to expand its African footprint.
The new funders include specialist and impact investors who focus on micro and inclusive finance ventures, according to Letshego. This new group of finance partners are global capital houses based in the United Kingdom and Europe with a keen interest in sustainable development in Africa.
The structured funding arrangement will deliver treasury benefits and mitigate funding risk for the Letshego Group by achieving geographical diversification in its funding base, increasing the current number of funders, securing longer tenors as well as reducing the Group’s overall open foreign exchange exposure by drawing new local currency-denominated facilities. After standard foreign exchange hedging operations, the funding will be available in Botswana Pula, Kenyan Shillings, Tanzanian Shillings and Nigerian Naira – some of the key currencies in which Letshego operates across the region.
Letshego Holding Group Managing Director, Chris Low said in the statement that his company was progressing well from short term and long term strategies. He said as Letshego progresses in its sustainable growth strategy, with marked in-roads in increasing inclusive finance through digital innovation, there was noteworthy increase in interest and support from new investors and funders. “These are financial partners who share our ambition in delivering a commercial strategy which supports long term economic value for Africa’s under-served communities,” he said.
Letshego will be allocating this funding to support a variety of growth ambitions, which include: expansion of the loan book in selected markets; further investment into Group systems and financial solutions technology; as well as embedding existing and new strategic partnerships which expand the Group’s customer base. Verdant Capital, a specialist Africa investment bank, has facilitated and assisted Letshego in structuring and finalising this latest funding programme. The Letshego Group continuously reviews and manages its funding sources to maintain acceptable levels in costs of funding, while delivering further value for customers and all stakeholders for the long term.
The Group which operates in 11 African Countries won the New Age Banking Summit 2 award for ‘Excellence in Microfinance Banking last year and it boasts of being on the right path to be Africa’s leading inclusive finance Group. Latest figures from the Group on financial year ended 31st December 2017 shows that the group‘s Total revenues exceeded P2.5 billion indicating 15% increase compared to the year ended December 2016 with yields on loans to customers and the cost of borrowings not registering any significant change.
Founded in 1998 and listed on the Botswana Stock Exchange in 2002, the group continues to grow as a pan African inclusive financial services provider.