Letshego Botswana, a subsidiary of the pan-African group Letshego Holdings, is surging ahead with a multi-pronged strategy of financial inclusion, which among other things includes provision of financial services to micro to small enterprises and affordable housing financial solutions.
The relatively new Chief Executive, Fergus Ferguson revealed this recently at a meet and greet session with the media. The confident Ferguson said there are various initiatives, which Botswana subsidiary has devised in a bid to help the unbanked, those seeking affordable housing as well as small entrepreneurs who are faced with lack of access to credit to expand their businesses.
A few years ago, the Botswana Stock Exchange (BSE) listed group Letshego Holdings Limited, which Letshego Botswana is a unit of, piloted an initiative that is aimed at supporting small businesses, including those who have won supply contracts with the central government. So far nearly 100 companies under this category have been assisted.
“I think we are now at a point where we need to make a (final) decision on this initiative (of SMMEs funding since it is currently being piloted),” noted Ferguson who was appointed in the position last November. He could not immediately state the value of loans disbursed to beneficiaries. Most SMMEs in Botswana are faced with challenges such as access to market, capital, mentoring and capacity.
Letshego Botswana is currently exploring the possibility of partnering to mentor and capacitate SMMEs with government agencies such as Local Enterprise Authority (LEA). The latter was formed in 2004 tasked with enterprise development of SMMes. In other markets where Letshego Holdings operates such as in Kenya, Swaziland and Namibia, SME funding has managed to transform customers’ lives positively. Over the years, citizens have complained about lack of affordable financial solutions to those seeking property.
The matter has been made worse by the fact that there are no regulations to residential property lettings or selling, leading to the sector depending mostly on demand and supply. “However, we are working with the regulator on how best we can assist (in home ownership space),” added Ferguson. The micro-lender is regulated by Non-Bank Financial Regulatory Authority (NBFIRA).
The bank previously applied for a banking licence with Bank of Botswana-BoB but it was rejected without any public explanation. Meanwhile, Ferguson told the media that Letshego Botswana continues to contribute significantly to the group.
According to information obtained from the Letshego website this Tuesday, the company (Letshego Botswana) now contributes over 40 percent to group assets and profits (of P6 billion and P1 billion respectively).
“In addition to formally employed individuals in the Government, parastatal and private sectors, we have made inroads into servicing the generally overlooked low to middle income mining sector employment force. We are furthering this inclusion drive by piloting a unique housing loan product that really does deliver affordable housing capability to our customer.”