Knowledge

Author: Ollen Machimbirike

Category:

Date: 4 April 2018

Letshego Announces Robust and Ongoing Product Diversification in 2017

letshego
 
Letshego announced its preliminary results for the financial year 2017 on the Botswana Stock Exchange (BSE). Verdant Capital is currently arranging a major private debt programme for Letshego. The first close of which was completed in Q1 2018, further announcements to follow. Verdant Capital’s programme complements Letshego’s successful refinancing of ZAR 465 M (USD 48 M) of maturing bonds on the Johannesburg Stock Exchange (JSE) completed in November 2017, as well the group’s deposit gathering initiatives.
In 2017, Letshego’s gross advances grew by 17% to BWP 8.2 Bn (approx. USD 865 M). Yields on loans to customers and the cost of borrowings were consistent with the prior year. The group continues to tighten its impairment methodology in preparation for the adoption of IFRS9. One negative is an additional tax provision of BWP 118 M (approx. USD 12 M) announced after the initial release which leaves return on equity approximately flat versus the prior year. The group remains well capitalised with total equity to total assets of 47.7%.
The group has continued its diversification of its business lines delivering meaningful financial inclusion outcomes. The group has been successful in ramping up its deposit mobilisation. Customer savings grew by 111% to BWP 228 M (approx. USD 25 M). New channels for customer savings have been opened: the first mobile savings solution (SmartSave) was rolled out in Ghana; the LetsGo Blue Box in Mozambique (and now has 15 000 account holders); and over 300 third party agents on-boarded across the twelve markets of operations.
On the credit side of the balance sheet: 250 schools, 750 teachers and 40 000 students’ lives have been impacted by Letshego’s education ecosystem pilots in Kenya, Nigeria and Tanzania; and Letshego’s first mobile lending solution was launched in Ghana.
On the corporate finance side, in early 2017, Letshego completed the acquisition of afb Ghana (Verdant Capital advised JUMO World on the sale), marking Letshego’s entry into its twelfth market. Separately, Letshego successfully IPO-ed its business in Namibia on the local stock exchange.

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