Letshego reports double digit growth
Letshego Holdings Limited has delivered satisfactory results that have yielded good growth at half year for the period ended 30th June 2017. This has seen growth in loans and operating income with Ghana featuring first time since the 100 percent Afb Ghana acquisition 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. Financial highlights for the six months ended 30th June 2017 show total assets increase by 16 percent to P8.7billion from P7.3billion in the same reporting period in 2016.
Profit before tax was P498million, a 2 percent increase from P489million in 2016 and total revenues exceeded the P1.2billion representing a 15 percent increase. The group has declared a dividend of 8.5 thebe per share retaining a 50 percent dividend payout ratio. Group Managing Director, Chris Low commented, “Our most recent acquisition in Ghana is already demonstrating positive results in integration and growth potential, and brings Letshego’s footprint to a total of eleven Sub Saharan markets. “Our positive loan growth will continue to benefit from our 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.” Letshego’s drive to diversify its solutions across existing markets is gaining traction, with a number of educational facilities in Tanzania and Nigeria now enjoying both credit and savings solutions. The Group’s agency network in Mozambique and Tanzania uses a number of different business models, with the aim of increasing access points for customers wherever they may be located.
Mozambique is the first market to pilot ‘Blue Box’, a technology-driven agency banking model which uses biometric authentication to on-board customers, while providing both saving and loan solutions for the under-served community. Low added, “Strategic partnerships remain an important catalyst to achieving our 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.
“Home improvement and affordable housing now constitutes 5 percent of our total loan portfolio, a percentage we aim to raise in the medium to long term.” Letshego group’s consumer lending segment is 88 percent of the overall loan portfolio with MSE (micro and small enterprises) at 12 percent. Loans and advances to customers are up 19 percent in Pula terms year-on-year (14 percent excluding Ghana), supported by stable interest margins and cost of funding. The quality of the 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 percent increase in borrowings, and a strong funding pipeline is in place to support the business growth going forward. Letshego continues to work towards delivering a meaningful and positive impact for customers and communities, as well as returns for shareholders. The Group’s recently launched campaign entitled ‘Improving Life,’ rewards and celebrates customers for productive and responsible financial behaviour. Letshego remains committed to providing simple, appropriate and accessible solutions to the financially under-served, in a sustainable manner.