Letshego denies defaults in Kenya, Uganda
Letshego Africa Holdings, the Botswana Stock Exchange quoted micro-lender this week moved swiftly to deny reports that the Group has defaulted in the servicing of any of its obligations in any of its subsidiaries.
This follows media reports from Kenya that, that the Botswana headquarters has defaulted on a $30.49 million for its subsidiaries in Uganda and Kenya. “We confirm that claims of default on the part of Letshego Kenya and Uganda are false and incorrect,” said the group whose Chief Executive is Aupa Monyatsi. Furthermore, the Africa focussed micro-lending titan stated that the Group’s annual results for 2023, first published on 22 March 2024, affirmed that the Group’s Expected Credit Loss (ECL) methodology had been adjusted, impacting 2023 results, and resulting in the restatement of 2022 financial results.
“As a result of these adjustments and other areas of judgement, the Group breached some covenants with some of its funders which are disclosed fully in our Integrated Annual Report for 2023. Beyond the covenant breaches, the Group has not failed on its debt obligations,” said Letshego. Letshego remains well capitalised and in a solid liquidity position. “The Group wishes to take this opportunity to thank its stakeholders, including funders and investors, for their ongoing partnership and commitment in supporting the Group’s pan-African inclusive finance strategy. For further information and official,” said the group.
Meanwhile, writing in the group’ latest annual report, Monyatsi stated Letshego’s business fundamentals remain strong despite the downside impact of adjustments to the Group’s ECL in 2023. “Although our operations were affected during the year by once offs as well as foreign exchange fluctuations and inflation-induced volatility, especially in Nigeria and Ghana (the latter we anticipate persisting in the first half of 2024), we expect these impacts to ease in the second half of this financial year, contingent on macroeconomic conditions,” said Monyatsi, who was appointed to head the group mid-2022. ‘Although the escalation of geopolitical tensions and regional conflicts pose severe headwinds to the region – five of our presence countries hold national elections in 2024 – we have assessed the socio-political and business impact risks from these elections as relatively low, and generally anticipate policy continuity in each of these regions’
The group Chief Executive further said they are committed to providing accessible and competitive financial solutions and products that empower individuals and businesses that are underserved. Our commitment to increasing the number of excited and satisfied customers across our markets will continue to reinforce our position as a trusted financial partner. “Our key areas of focus centre on collections and recoveries whereby efforts will be geared to claw back on increased provisions realised in 2022 and 2023. We will leverage opportunities for maximising capital efficiencies and optimising balance sheet and funding structures. We remain mindful of cost rationalisations and the current macroeconomic landscape and will continue to evaluate the Group’s cost structures given the anticipated subdued growth in our operating markets. Despite the headwinds of the previous financial year, we remain confident in concluding our 6-2-5 strategy by the end of 2025,” he said confidently.