Economic upheavals dent Letshego operations
Russia-Ukraine war and the ongoing economic uncertainties have led to credit losses at Letshego. The pan African financial services’ group interim results for the year ended 30 June indicate that the company’s credit losses increased by 8.7 percent to P613 million in June 2022 from P564 million in December 2021
“The increase was driven by lagging recoveries in the Group’s MSE sectors post COVID-19, as well as economic repercussions from the Russia-Ukraine turmoil. Economic challenges are evident in rising food and commodity prices, inflationary flare ups and rising interest rates,” said Letshego Group Chairman, Philip Odera.
He said the Group expect tightening macro-economic conditions to continue impacting collections and recoveries momentum, particularly for the non-deduction at source portfolios. Despite the economic upheavals, Odera said Letshego remains steadfast and committed to the growth potential that its five year transformation strategy will deliver.
“The Group is confident in the sustainable shareholder and economic returns its digital investment strategy will offer, supported by tangible business efficiencies that arise with the ongoing integration of its Target Operating Model (TOM).”
However, though global oil prices appear to be levelling once more, Letshego believes impact on regional markets will be gradual. “The effects of increased inflation due to oil price hikes, supply chain disruptions and production upheavals are expected to linger in the second half of the year.
Inflation pressures are expected to continue, with regional governments likely to implement further monetary policy action to protect downside impact within their respective economies,” Odera.