Letshego Holdings Limited will continue to push more deals through brownfield model, as it works well for the company at the moment, its Chief Executive Chris Low has said. The micro-lending titan is currently chasing two deals in the continent, being Nigeria and Tanzania.
All the deals are being pursued through third parties, which suggests once such deals are sealed, the Botswana Stock Exchange (BSE) listed company will have to pay whatever such parties will have agreed, as opposed to starting new business from scratch. “Brownfield model allows us to enter any market more quickly. In other countries, it can take months before we are granted a trading license. If we buy, we are sure we will inherit existing market with existing clients,” said Low during a recent media briefing. Letshego was formed as a greenfield project 17 years ago in Gaborone, before expanding its financial services into the African market.
The company is now seeking to enter the continent’s biggest economy-Nigeria. If it gets the nod, the company will acquire 100 percent of a depositing taking institution in Africa’s most populous nation.A similar deal is currently being pursued in Tanzania. Letshego is waiting for regulators to give the two deals the go ahead. Low said the above deals would be funded through existing cash reserves. Other external funding options will be exercised when the need arises, said Low. “In recent years, Letshego has diversified its sources of funding to include development finance institutions (DFIs), commercial banking, our medium term notes and investment funds,” the company said in its 2014 annual report.
On other matters, Letshego Botswana Chief Executive, Fred Mmelesi said going forward the company will work hard to help government push the ‘financial inclusion’ agenda. “Financial inclusion is a topical issue in Botswana and elsewhere,” explained Mmelesi.
The micro-lender will use other methods such as electronic channels to help those excluded from the financial system. The company will also be flexible, said Mmelesi. Small to medium enterprises will also be assessed on their merits to get the necessary financial assistance they need.