Letshego Holdings Limited has announced plans to list in the Namibian Stock Exchange (NSX) as part of its financial inclusion strategy.
This will see the company put up its shares for sale to Namibians through a planned Initial Public Offering (IPO). In a statement, the company states that its purpose is to provide simple, appropriate and accessible solutions to the financially under-served and excluded in a sustainable manner, including, but not limited to government employees.
“In line with this the planned IPO will include people who are typically financially excluded and are a key part of Letshego’s financial inclusion strategy,” says the statement.
Letshego Namibia Holdings Chief Executive, Ester Kali said the planned IPO will be a first of its kind on the NSX as the public offer will prioritise educating members of the general public, giving preference to Namibian residents. This is with a primary focus on previously disadvantaged Namibians.
“We believe that to be totally financially inclusive, we should offer Namibians the opportunity to be part of our growth. Through the planned IPO, partners, customers and wider stakeholders of Letshego have an opportunity to own shares in this business they have come to know so well. As we grow, so shall ordinary Namibians’ wealth. We believe this is what empowerment is all about, as Letshego is now becoming our Letshego,” she said.
Kali said they will be calling the planned IPO “Ekwafo Letu” which means “Our Support”. “This is in recognition of what Letshego, at its core, stands for: to provide support. Support to those who are typically under-served by traditional financial institutions. Our Letshego story is about empowerment, via the solutions we provide, and now via Ekwafo Letu,” said Kali.
Meanwhile Letshego Holdings Limited subsidiary in Namibia acquired a commercial banking licence for Letshego Bank Namibia in 2016 enabling it to offer more comprehensive financial services in Namibia after being granted a provisional licence in 2014.
Letshego Group entered the Namibian market after the group bought all the shares of Edu-Loan (Namibia), a registered Namibian company since 1997.
The company has been dedicated to embracing financial inclusion through helping over 55,000 customers, including the rural and under-served populations, in Namibia with meeting their housing, health, education and business needs. Through this, Letshego aims to drive socio-economic development across its African footprint.
Letshego Namibia serves over 50 percent of the Namibian civil service who now benefit from its deposit-taking and broader services. Further, it supports the National Harambee Prosperity Plan, which states ‘the most effective way to address poverty is through wealth creation’.
The Group has been publicly listed on Botswana Stock Exchange since 2002 and currently it is one of Botswana’s largest indigenous groups, with a market capitalisation in excess of USD400 million (NAD5.2 billion) that places it in the top 50 listed sub-Saharan companies (excluding-South Africa) and with an agenda focused on inclusive finance.
Through its 11-country presence across Southern, East and West Africa (Botswana, Ghana, Kenya, Lesotho, Mozambique, Namibia, Nigeria, Rwanda, Swaziland, Tanzania and Uganda), its subsidiaries provide microfinance banking and consumer lending solutions.
Botswana based financial services institution, Letshego Holdings Limited last week celebrated an eighteen year history of growth, diversity and improving lives across its 10 country African footprint. Today it prides itself as the largest indegenous company in the Botswana Stock Exchange by market capitalisation.
Letshego was incorporated in March 4, 1998 as Micro Provident Botswana Limited, a microfinance institution whose core function was to provide unsecured loans to clients. It then commenced trading in September 1998 and eventually listed in the Botswana Stock Exchange in 2002 through a successful initial public offer with an aim to go on regional expansion. The company started with an establishment of a small team of 30 professionals in Gaborone issuing loans of up to P1,000.
Today the group employs over 2,300 team members, across more than 20 nationalities.
Letshego is a Setswana word meaning “support” that epitomises the group’s ability to partner with individuals as well as micro and small enterprises (MSE) through provision of financial services. Since September 2002, the company has been dealing directly with its clients who are mainly employees of the central and local governments, parastatals or quasi government and some private companies. Today Letshego is the largest indigenous company on the BSE by market capitalisation in excess of US$634 million as at 31 December 2015 and profitability in excess of US$104 million profit before tax for the full year 2015. The company currently ranks among the top 40 market value sub-Saharan Africa companies excluding South Africa.
The group has more than 250,000 consumers being served by its micro lending subsidiaries across ten countries in Southern and East Africa. These subsidiaries provide short to medium-term unsecured loans to formally employed clients.
Letshego’s regional presence
Between 2005 and 2007, the group expanded to Uganda, Swaziland, Tanzania and Zambia. These were all through greenfield investments in these countries. In August 2008, the group made its first foreign acquisition when it acquired a majority stake in Eduloan, an MFI in Namibia. In the same year, the company adopted the Letshego brand as its official name. The expansion drive continued into 2009 with the setting up of a subsidiary in Mozambique.
In 2011, the group commenced its operations in Lesotho. In the same year, the group announced its intention to acquire a 62.52 percent in Micro Africa Limited, a Kenyan based MFI with subsidiaries in Kenya, Uganda, Rwanda and South Sudan. This acquisition gave the group access to three new countries and an increase in its Ugandan customer base due to its existing presence. This acquisition was completed on June 1, 2012. This saw the group having presence in 11 countries. Letshego Holdings took full control of Micro Africa Limited in 2013.On December 1, 2013 the group divested from Letshego Financial Services Zambia. This saw its exit from Zambia reducing the group's presence to 10 countries.
Letshego’s current loan book
As from 31st December 2015, Letshego evidenced strong growth, performance and returns to shareholders with a number of firsts recorded.Net advances exceeded P6billion, total revenues exceeded P2billion and profit before tax crossed the P1billion mark, making it the largest indegenous company on th BSE by market cap.
Financial inclusion goals
Letshego continues to embrace financial inclusion; this includes responsible lending practices and encouraging productive use of loans.The group highlighted that they have completed research indicating the social impact it had achieved across its markets pointing to loans being used for education, health, business, or livelihood purposes. In markets such as Mozambique, for example, this figure is at 70 percent, while Tanzania, Uganda and Rwanda see 60 percent each.Speaking at the anniversary last week, the group’s Managing Director, Chris Low emphasised that since 1998, what has set the company apart from the rest of other financial institutions is their deliberate positioning and clear focus to cater for those who conventional institutions see as “risky”. “We are humbled by, and proud of our invaluable niche that has improved lives by servicing hundreds of thousands customers, that in turn has positively impacted their families and their communities. Through our assistance to the underserved, we are grateful to have contributed towards Africa’s development.” Low highlighted that Letshego is focused on strategic partnerships to accelerate execution capabilities.As an example, new innovative financial solutions piloted by the business currentlyinclude micro insurance, agriculture supply chain financing and asset financing. Also, he shared that Letshego has done well in servicing the renewable energy industry through the provision of big loans for farmers, water tank loans, and energy efficient ’jiko’ stove loans and solar power loans – all of which they are working to roll out beyond the East African region.
What does “coming of age” symbolise?
According to Chris Low, who has been sitting at the helm for the past three years after the departure of Jan Claasen, “to me when I think back to my 18th birthday, I can vividly recollect standing on the prow of an Australian naval ship entering Sidney Harbour with the imposing architectural structure that is the Sydney Harbour Bridge ahead of me, the beautiful opera house to one side and dolphins chasing the bow waves. I was alone in that few knew my story of how I came to be on that ship, I had a sense of trepidation of what was next, yet also I had a feeling for the great things to come ahead of me – the whole world was there for taking and with my schooling and parenting, I was well placed to take advantage of the opportunities that the world presented.”
According to Low, Letshego feels somewhat the same as he did back then. “We have a vision to be Africa’s leading inclusive finance group. We have developed a strong business platform that will enable us to deliver on this intent and yet there are many challenges ahead and fast changing world from a technology perspective that we have yet to fully adopt. Success will come through our people and will require growth, an approach to diversity and a commitment to improving lives.”
Govermnet calls for private sector partnerships
Minister of Finance and Development Planning, Kenneth Matambo has stressed for the urgent need for increased collaboration between the government and private sector to drive national development. Matambo, who was the key speaker at the anniversary said, “as government, we remain committed to adopting policies and programmes aimed at stimulating local economic development. I therefore urge the private sector to take responsibility for aligning their operations with our National Development Goals so that, together, we move Botswana forward into the realisation of Vision 2036 and beyond.”
Letshego Holdings Limited, the Africa-focused micro-lender has been granted a full commercial banking license for its subsidiary in Namibia, the company said in an emailed statement on Thursday afternoon. Before the application was given the thumps up this week, Letshego Namibia was operating with a provisional banking license that it was granted two years ago July 2014.
The approval now means, Letshego Namibia will now offer comprehensive financial services in the country. In Namibia, Letshego will now go pound for pound with other established banks such as Bank Windhoek and Standard Bank. Chris Low, the group Chief Executive of the latest development, which further cements its position as a truly diversified financial, services group.
“This is an exciting moment for Letshego and confirms our commitment to deepening financial inclusion across the continent. We are dedicated to providing accessible financial services to those that are under-served by traditional banks - obtaining a banking license in Namibia means we can expand our services to those that need it most, helping bring to life the aspirations of the Namibian public,” he said. Even Letshego Namibia Chief Executive cannot hold her excitement. “Our strategy will continue to focus on leading the development and provision of inclusive finance that encompasses broad based financial services,” said Ester Kali.
Letshego Namibia serves over 50 percent of the Namibian civil service who will now benefit from its deposit-taking, and broader, services. Further it supports the National Harambee Prosperity Plan, which states ‘the most effective way to address poverty is through wealth creation’ and actively ensures its business strategy and mandate positively aligns with this.
Letshego Holdings, a micro-lending behemoth has reiterated its plans of becoming a truly inclusive financial services group within the continent, the head of its local subsidiary has disclosed. Speaking on Tuesday night at a function for Botswana-Kenya businessmen and women, Letshego Botswana CEO, Frederick Mmelesi said their focus is clearly aligned at assisting low to middle income earners, who have been excluded by the financial system for years especially in Africa’s rural areas.
This is the plan that Chris Low and his executive committee will put much emphasis on going forward. “Through a broad-based financial services offering underpinned by innovation and an inclusive finance agenda, we work to deliver simple, appropriate and affordable solutions to empower fellow Africans who are typically underserved or unbanked,” Mmelesi told the event which was attended by business CEOs and diplomats from Botswana and Kenya respectively. The Letshego Botswana top executive, who has been with Letshego from day one, stated that one such example of financial inclusion is their low income housing finance offering.
The product is already a hit in Kenya, the biggest economy in Eastern Africa, where it has a portfolio of $20 million (P200million). The company has already started rolling the solution (low income finance product) to Botswana market and early signs show that demand will increase in the foreseeable future. Letshego Group Head of Corporate Affairs, Mythri Sambasivan-George said in an earlier engagement with BG Business. BSE listed Letshego, which has operations all over Africa, currently boasts a customer base of 300,000 borrowers and 100,000 savers. On another note, Mmelesi told the audience that, Letshego Kenya, which was opened some eight years ago, is the fastest growing subsidiary in Kenya providing credit services to small and micro-entrepreneurs, salaried employees, and civil servants. It was formally called Micro-Finance Africa.
Letshego, which will later this month (July) celebrate 18 years of existence, said its robust growth in Botswana and Kenya has been up-scaled by the healthy relations between the institution and governments of the two former British colonies. The Tuesday networking session also had speakers from Kenyan government. The function was done as part of a three-day visit to Botswana by Kenyan President Uhuru Kenyatta this week. During his stay in Botswana, Kenyatta, the son of founding President Jomo Kenyatta and his counterpart President Ian Khama discussed pertinent issues surrounding their socio-economic relations that span decades. The Kenyan President left on Wednesday morning.
Botswana Insurance Holdings Limited (BIHL) group announced its plans to expand its operating division, Legal Guard outside Botswana.
Presenting the group’s half year ended 30 June 2015 results on Wednesday, BIHL group chief executive, Gaffer Hassam said in the next six months they are looking for market opportunities outside Botswana. “Legal Guard has three percent market share in the insurance industry in Botswana, so it has a lot of opportunities. But in the next six months we will be exploring the market opportunities outside Botswana,” said Hassam. Speaking to BG Business he said they have not yet identified the countries but are looking at Southern Africa. He said 2015 will be dedicated to a continued focus on the recovery phase of the business strategy as well as commencement of activities to exploit a dominant market position and related competitive advantages. “The second half of 2015 will also witness the introduction of new products into the market,” said Hassam.
Following the sale of its general insurance business (BIHL Sure!), which comprised short term insurance and legal aid cover, Legal Guard in 2014, BIHL refocused on Legal Guard business. Hassam explained that Legal Guard is the second major contributor to BIHL group revenue after Botswana Life. He said in this year they introduced a new three-year strategy as a roadmap for guiding Legal Guard business through recovery and consolidation to sustainable profitability. “As part of the recovery phase of the strategy, the first half of the year has seen Legal Guard continuing its efforts to reinvigorate the business by increasing sales, improving the customer service experience and enhancing operational efficiencies,” said Hassam. He said the new strategy has resulted in a marked improvement in financial performance as illustrated by 22 percent increase in revenue compared to the first half of 2014. The new strategy is about growing the market and educating the public about legal insurance.
“We have seen a meaningful growth in profits this year so we want to maintain this growth standard,” he said. “Legal Guard was struggling in profitability but the rebranding has resulted in the positive profit. Its brand identity has also been refreshed to symbolise the rejuvenation of the business,” he said. Since its establishment in 2012, BIHL Sure! was continually recording losses as it registered an operating loss of P27 million in 2014. In the six months ended 30 June 2015 the group has recorded the net insurance premium increase of 32 percent to P1.3 billion and the value of new business increased by nine percent to P78.9 million.
In the first half of 2015, the group rolled out the new five-year strategy for the life insurance, which is focused on steering the company towards sustained growth. Hassam said with the implementation of the new strategy now underway, management firmly believes that the company will continue delivering real sustainable growth on all its key performance indicators despite growing competition and muted economic growth. BIHL group operations include Life Insurance, (Botswana Life), asset management (Botswana Insurance Fund Management) and Legal Guard. It also has associate holdings of 23 percent in Letshego Holdings and 33 percent in Funeral Services Group (FSG).
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.
Letshego Holdings Limited’s provisional banking licence in Namibia, which ended mid-July, has been extended by another six months, BG Business has learnt. The Pan-African micro-lender is currently trading with a provisional banking licence, which was first granted in July 15, 2014.
It has already been extended twice due to a variety of reasons. According to Letshego’s head of corporate affairs, Namibian, Mythria Sambasivan-George, Namibian authorities recently passed a law stipulating that any bank that sets up in the country must have at least 25 percent of indigenous investors. Before Letshego’s provisional banking licence was issued, that was not the case.
This has forced Letshego to ask for an extension, primarily to identify local investors. Letshego Holdings owns 85 percent of its Namibian subsidiary. “We still have to clear the issue of shareholding,” the group Chief Executive Chris Low told BG Business after a press conference on Wednesday. He is ’99 percent’ confident that the company will be granted a full banking licence come next year. “Operationally we are fine,” he said. The central bank in Namibia has already inspected their operation. This week, Letshego executives reiterated that they are still on a path to become a broader financial service firm. Such company, they said should be able to take deposits, savings and associate services.
This will mean the BSE listed firm will continue to seek approvals in jurisdictions where they want to offer deposit taking services. Letshego’s companies in Rwanda and Mozambique have commenced deposit-taking activities. In Botswana, the central bank has rejected its application for a banking licence. It is understood that the micro-lender had wanted a specific licence of deposit taking, which Bank of Botswana was allegedly unable to give out since it does not have such provision.
BG Business understands that, government is already working on a draft paper, which if approved by stakeholders and ultimately parliament, will allow for tier banking licence issuance.This basically means a specific licence within the banking industry, same as in Rwanda. As of now, Letshego does not have any plans to re-apply for a banking licence in Botswana where it first planted its roots 17 years ago.