Letshego, the Africa-focussed financial services behemoth, has ventured into the highly competitive housing finance market, thorough a product known as ‘Ikagele’ . According to regional Chief Executive (Botswana& Eswatini), Kgotso Bannalotlhe, the product is already a hit with customers. Below, he explains to KOOBONYE RAMOKOPELWA, why they are rolling up sleeves to take ‘the big boys’ in the housing market head on through innovative solutions.
BOTSWANA GUARDIAN: Who is the primary target market for Letshego's Affordable Housing product?
KGOTSO BANNALOTLHE: Letshego's target market for this product is all Batswana who want to build and own a home in any part of the country. Our key focus will be especially those who have access to employer provided accommodation like teachers, army, police, mine workers, who would like to build their own homes such that when they leave their employment they have somewhere to call home. It's also for city dwellers to build decent accommodation in their home villages. Letshego will finance and provide a turnkey solution to a customer that constructs (build) a home of their choice in a part of the country of their choice.
GUARDIAN: Are there specific demographic segments or income brackets that the product aims to serve?
BANNALOTLHE: Letshego’s home ownership initiative is geared to all our valued salaried customers inclusive of Government, especially those who stay in institutionalised housing. We serve everyone, from lowest in the corporate ladder to the most senior who wants to build a home anywhere in the country. For some it will be their first and only home and for others to build in their home villages or even farms.
GUARDIAN: How has the product been received since it was first launched some two years ago?
BANNALOTLHE: The affordable housing product has seen a great interest in the market from our customers. Last year, we enhanced our offering to offer a simple shop for a house and have it fully built turnkey experience which makes it seamless and stress free for our customer. Costs are pre-calculated, plans are preapproved to suit our customer persona, bringing tailor made incremental housing models with affordability in mind. Since then customer interest in the product has been strong and we are relaunching this innovative solution to the market this week. We believe it will revolutionise the ability to own a home in Botswana and make it accessible to everyone, everywhere in the country and take away all the hassles we have come to associate with construction. We are very certain our offering will be unique and very relevant.
GUARDIAN: What is the competitive advantage that Letshego’s Affordable housing product has over already existing home loans in the market?
BANNALOTLHE: Our Affordable Home Ownership (Ikagele) loans have an unmatched reach where we are able to do a house/plot purchase and turnkey construction anywhere in Botswana. We recognize the importance home ownership 'ko gae' is for every Motswana. Therefore, we offer 100% Loan To Value financing as we are also aware of the challenges that Batswana are facing with the requirements to raise deposits in order to access such a product. We also offer this everywhere in Botswana, a first for any institution offering home ownership financing in Botswana. We have gone to lengths to really make this affordable to many Batswana by eliminating professional costs by putting together relevant pre-approved plans which save applicant's costs of an Architect and a Quantity Surveyor as an example. The housing package also comes bundled with options such as Solar Geysers, solar electricity, JoJo tanks for water capturing that is meant to ensure that over and above making the cost of construction affordable, the cost of upkeep will be lower as well.
GUARDIAN: What is the current landscape of affordable housing in the regions where Letshego operates?
BANNALOTLHE: Letshego operates in 11 Markets and is committed to providing affordable housing for its citizens in those markets with the mandate to offer low-cost housing for individuals such as government employees and in some markets to Micro and Small entrepreneurs owned businesses. We have tailored offerings elsewhere in our markets like Namibia, but in this offering, we have made it very relevant for Botswana to own a home anywhere in the country and have it fully financed and fully built hassle free.
GUARDIAN: What are the key challenges and opportunities within this market segment?
BANNALOTLHE: The challenges we see are the ones that Letshego is solving with this problem. Low home ownership because banks dictate strenuous terms to home ownership, excluding various parts of the country from home ownership. We embrace that Batswana of all walks of life want to own a home of their choosing in a location that feels like home most to them. We solve the issues of low financing, headaches of the construction process all in one solution.
GUARDIAN: What are the unique features and benefits of Letshego's Affordable Housing product compared to competitors? How does it address the needs and preferences of the target market?
BANNALOTLHE: Through financial Inclusion agenda, there is an opportunity to tap on this market especially to customers who have been excluded by commercial Banks. • Letshego’s unique proposition allows its customers to build anywhere in Botswana and have 100% of the home financed. For those who have taken loans for other purposes and have plots, we can even consolidate their current borrowings. • Offer a wide variety of pre-approved and pre-costed plans from entry level starter to advanced incremental level to suite homes for our customer’s needs. • Letshego’s Marketplace has a variety of affordable professional service providers inclusive of panelist of local micro and small entrepreneurs (MSE) like turnkey contractors, architects and quantity surveyors that our clients can choose from.
GUARDIAN: How flexible are the terms and conditions of this product?
BANNALOTLHE: The terms are very flexible in having a longer term to repay that is consistent with loans of home ownership, higher loan to value and allowing home ownership across the full breadth of Botswana.
GUARDIAN: Are there any strategic partnerships or collaborations in place to enhance the accessibility and affordability of housing for customers?
BANNALOTLHE: Letshego will enter into strategic partnerships with relevant value stream drivers to ensure the successful delivery of this product. These include suitable and qualified local individuals and entities that form part of the property value chain to be able to offer an array of services to clients obtaining a home loan through Letshego. The partnerships are inclusive of key building supplier merchant which enables our clients to get discounts when purchasing building materials as well as local housing developers, Valuers, realtors etc.
GUARDIAN: What strategies does Letshego employ to attract new customers and retain existing ones for its Affordable Housing product?
BANNALOTLHE: At Letshego, the property to be financed can be situated at any place in Botswana; villages, towns, farms or cities up to 100% LTV. The housing loan will range from ten thousand Pula (P10 000) to One million Pula (P1 000 000). Simple access to affordable housing through the turnkey delivery of housing everywhere in Botswana, strengthening communities. Able to consolidate existing loans and deliver income stability and financial support.
GUARDIAN: What measures are in place to mitigate risks associated with lending in the affordable housing sector, such as credit risk, market risk, and operational risk?
BANNALOTLHE: A risk assessment has been conducted and internal measures and controls have been put in place to mitigate the risk associated with offering of this product and is reviewed frequently.
GUARDIAN: How does Letshego leverage technology and innovation to streamline processes, improve customer experience, and drive operational efficiency in delivering its Affordable Housing product?
BANNALOTLHE: The Affordable housing product will be accessible through the existing service channels such as branch network, DSAs and the LetsGo Digital Mall (App). Our core banking system has a provision to offer such products. The product is offered to existing clients of Letshego and new customers who meet the affordability criteria. Please note that the existing affordability assessment tools will be used to ascertain on whether a client qualifies for a housing loan.
GUARDIAN: How much has been disbursed to customers accessing the Affordable Housing product since it was debuted?
BANNALOTLHE: The product has experienced a year on year growth since debut. Relaunching the Ikagele – Aga ko Gae campaign in March 2024 will propel the product awareness and uptake.
KGOTSO BANNALOTLHE: Letshego's target market for this product is all Batswana who want to build and own a home in any part of the country. Our key focus will be especially those who have access to employer provided accommodation like teachers, army, police, mine workers, who would like to build their own homes such that when they leave their employment they have somewhere to call home. It's also for city dwellers to build decent accommodation in their home villages. Letshego will finance and provide a turnkey solution to a customer that constructs (build) a home of their choice in a part of the country of their choice.
GUARDIAN: Are there specific demographic segments or income brackets that the product aims to serve?
BANNALOTLHE: Letshego’s home ownership initiative is geared to all our valued salaried customers inclusive of Government, especially those who stay in institutionalised housing. We serve everyone, from lowest in the corporate ladder to the most senior who wants to build a home anywhere in the country. For some it will be their first and only home and for others to build in their home villages or even farms.
GUARDIAN: How has the product been received since it was first launched some two years ago?
BANNALOTLHE: The affordable housing product has seen a great interest in the market from our customers. Last year, we enhanced our offering to offer a simple shop for a house and have it fully built turnkey experience which makes it seamless and stress free for our customer. Costs are pre-calculated, plans are preapproved to suit our customer persona, bringing tailor made incremental housing models with affordability in mind. Since then customer interest in the product has been strong and we are relaunching this innovative solution to the market this week. We believe it will revolutionise the ability to own a home in Botswana and make it accessible to everyone, everywhere in the country and take away all the hassles we have come to associate with construction. We are very certain our offering will be unique and very relevant.
GUARDIAN: What is the competitive advantage that Letshego’s Affordable housing product has over already existing home loans in the market?
BANNALOTLHE: Our Affordable Home Ownership (Ikagele) loans have an unmatched reach where we are able to do a house/plot purchase and turnkey construction anywhere in Botswana. We recognize the importance home ownership 'ko gae' is for every Motswana. Therefore, we offer 100% Loan To Value financing as we are also aware of the challenges that Batswana are facing with the requirements to raise deposits in order to access such a product. We also offer this everywhere in Botswana, a first for any institution offering home ownership financing in Botswana. We have gone to lengths to really make this affordable to many Batswana by eliminating professional costs by putting together relevant pre-approved plans which save applicant's costs of an Architect and a Quantity Surveyor as an example. The housing package also comes bundled with options such as Solar Geysers, solar electricity, JoJo tanks for water capturing that is meant to ensure that over and above making the cost of construction affordable, the cost of upkeep will be lower as well.
GUARDIAN: What is the current landscape of affordable housing in the regions where Letshego operates?
BANNALOTLHE: Letshego operates in 11 Markets and is committed to providing affordable housing for its citizens in those markets with the mandate to offer low-cost housing for individuals such as government employees and in some markets to Micro and Small entrepreneurs owned businesses. We have tailored offerings elsewhere in our markets like Namibia, but in this offering, we have made it very relevant for Botswana to own a home anywhere in the country and have it fully financed and fully built hassle free.
GUARDIAN: What are the key challenges and opportunities within this market segment?
BANNALOTLHE: The challenges we see are the ones that Letshego is solving with this problem. Low home ownership because banks dictate strenuous terms to home ownership, excluding various parts of the country from home ownership. We embrace that Batswana of all walks of life want to own a home of their choosing in a location that feels like home most to them. We solve the issues of low financing, headaches of the construction process all in one solution.
GUARDIAN: What are the unique features and benefits of Letshego's Affordable Housing product compared to competitors? How does it address the needs and preferences of the target market?
BANNALOTLHE: Through financial Inclusion agenda, there is an opportunity to tap on this market especially to customers who have been excluded by commercial Banks. • Letshego’s unique proposition allows its customers to build anywhere in Botswana and have 100% of the home financed. For those who have taken loans for other purposes and have plots, we can even consolidate their current borrowings. • Offer a wide variety of pre-approved and pre-costed plans from entry level starter to advanced incremental level to suite homes for our customer’s needs. • Letshego’s Marketplace has a variety of affordable professional service providers inclusive of panelist of local micro and small entrepreneurs (MSE) like turnkey contractors, architects and quantity surveyors that our clients can choose from.
GUARDIAN: How flexible are the terms and conditions of this product?
BANNALOTLHE: The terms are very flexible in having a longer term to repay that is consistent with loans of home ownership, higher loan to value and allowing home ownership across the full breadth of Botswana.
GUARDIAN: Are there any strategic partnerships or collaborations in place to enhance the accessibility and affordability of housing for customers?
BANNALOTLHE: Letshego will enter into strategic partnerships with relevant value stream drivers to ensure the successful delivery of this product. These include suitable and qualified local individuals and entities that form part of the property value chain to be able to offer an array of services to clients obtaining a home loan through Letshego. The partnerships are inclusive of key building supplier merchant which enables our clients to get discounts when purchasing building materials as well as local housing developers, Valuers, realtors etc.
GUARDIAN: What strategies does Letshego employ to attract new customers and retain existing ones for its Affordable Housing product?
BANNALOTLHE: At Letshego, the property to be financed can be situated at any place in Botswana; villages, towns, farms or cities up to 100% LTV. The housing loan will range from ten thousand Pula (P10 000) to One million Pula (P1 000 000). Simple access to affordable housing through the turnkey delivery of housing everywhere in Botswana, strengthening communities. Able to consolidate existing loans and deliver income stability and financial support.
GUARDIAN: What measures are in place to mitigate risks associated with lending in the affordable housing sector, such as credit risk, market risk, and operational risk?
BANNALOTLHE: A risk assessment has been conducted and internal measures and controls have been put in place to mitigate the risk associated with offering of this product and is reviewed frequently.
GUARDIAN: How does Letshego leverage technology and innovation to streamline processes, improve customer experience, and drive operational efficiency in delivering its Affordable Housing product?
BANNALOTLHE: The Affordable housing product will be accessible through the existing service channels such as branch network, DSAs and the LetsGo Digital Mall (App). Our core banking system has a provision to offer such products. The product is offered to existing clients of Letshego and new customers who meet the affordability criteria. Please note that the existing affordability assessment tools will be used to ascertain on whether a client qualifies for a housing loan.
GUARDIAN: How much has been disbursed to customers accessing the Affordable Housing product since it was debuted?
BANNALOTLHE: The product has experienced a year on year growth since debut. Relaunching the Ikagele – Aga ko Gae campaign in March 2024 will propel the product awareness and uptake.
