Letshego aims to be pan-African digital giant
Mbongeni Mguni | Monday March 14, 2022 06:00
From its traditions as a deduction at source business targetting the civil service, Letshego has expanded over the years to the mass marketing of its credit products and also financing of small to medium enterprises.
The microlender has also grown its reach to 10 other African countries and embarked on an aggressive digitisation strategy that has increased its customer base beyond the deduction at source core.
CEO, Andrew Okai said digital subscribers across Letshego’s African markets had risen from 100,000 in December last year, to 325,000 in March and were growing at approximately 100,000 per month. The digital platform, known as Letsgo Digital Mall, offers various core Letshego loan products, as well as value-added services such as education and housing offered via partnerships the microlender has secured in specific markets.
Customers can log into the mall via the website, USSD (text message), Whatsapp or from their mobile phones and access approvals within a short space of time.
“We are shifting from a microfinance institution to a digital retail financial services enterprise,” Okai said at a briefing for the group’s 2021 financial results last week. “It’s clear that with all the work we have done and the value we have added, the more digital we become, the closer we move to be a global digital company. “With the digital mall, we are going beyond financial services and into launching social impact projects that are also of commercial value to our shareholders, such as affordable housing.”
The shift, which is part of Letshego’s 6-2-5 strategy, has resulted in the growth of the microlenders’ deduction at source clients for the first time since 2017. In Botswana, which boasts the highest profitability for Letshego, deduction at source customers hovered between 30,000 and 40,000 for years. With the introduction of the Letsgo Digital Mall, this figure has grown to 90,000.
“More than 50% of our customers are now on the mall and so it’s not just about moving the existing customers to digital, but growth of our overall customer base,” Okai said.
Letshego group chief operations officer, Aupa Monyatsi told BusinessWeek that at five million customers on digital, Letshego would be the pre-eminent group in that particular sector of Africa’s fintech.
“This thing we are aspiring to build is not about catching up. “it’s a niche that’s not occupied by anyone. “The shape we will be in, the platform and the products, will place us in a unique position because the others do not have the business model that we have,” he said.
For Letshego, building up the digital mall with its various services and reach, is key to future growth, particularly as the deduction at source model is vulnerable to pressure such as government actions that affect the civil service.