Letshego refocuses its African dream
Mbongeni Mguni | Tuesday June 16, 2026 11:40
January 2005 was a history-making month for Letshego Africa. The then seven-year old microlender officially established a presence outside Botswana for the first time, marking a bold and pioneering move for a local company, as its peers were and generally continue to be conservative in their expansion outlook.
Letshego’s choice of address for its debut expansion was equally ambitious, skipping over the regional neighbours and reaching to Uganda, a market removed from the familial comforts of Botswana and Southern Africa.
Next Friday, June 19, Letshego Africa’s board will ask shareholders to approve the sale of not only the Uganda subsidiary, but four other entities the microlender established over the years as part of its East and West African expansion.
The sale has been concluded with Axian Digital Venture Holding and Management Limited for $62.7 million or about P840 million. Letshego estimates that it is making a P281.1 million loss on the sale.
Still shareholders are being asked to approve the deal, with the board asserting that the value secured falls within an acceptable valuation range and represents fair value to shareholders “in the circumstances”. The request to shareholders belies the troubles Letshego has faced in expanding into Africa, doing business there and finding an exit.
“The Group has experienced adverse trading conditions in certain East and West African operations arising from macroeconomic pressures, foreign exchange volatility, inflationary conditions, increased credit impairments and regulatory developments, which contributed to losses recorded in certain subsidiaries during the financial year ended 31 December 2025. “These circumstances formed part of the strategic considerations underlying the proposed transaction,” directors wrote in an AGM invitation to shareholders.
In fact, Letshego Ghana Savings and Loans PLC, Letshego Faidika Bank Tanzania Limited, Letshego Microfinance Bank Nigeria Limited, Letshego Rwanda Limited, and Letshego Uganda Limited, collectively recorded a loss of P519.5 million in Letshego’s last financials. This represented a deterioration from a loss of P154.8 million in the prior period.
Letshego is far from being alone in discovering the difficulties of expanding deeper into Africa.
MTN, South Africa second largest mobile network, was hit with a mammoth $5.2 billion fine in Nigeria in 2015 after failing to disconnect unregistered SIM cards by a particular deadline. Its CEO resigned and lengthy negotiations had to take place to get company back into the good graces of the Nigerian government.
Shoprite, South Africa’s largest retailer, also got its fingers burnt in its African expansion, being hit by factors similar to Letshego’s own woes and eventually divesting from five countries including Nigeria, Uganda, Tanzania, Kenya and Madagascar.
Closer to home, Choppies had its own harsh experience in Africa. in 2020 and after an aggressive expansion, the country’s largest retailer began exiting South Africa, Kenya, Tanzania and Mozambique, following losses.
Choppies troubles and journey back are remarkably similar to Letshego. The retailer built a successful business model on local soils and then “exported” this to Africa with dreams of success. A wave of uniquely African challenges and dynamics hit and soon shareholders were crossing swords at AGMs, accusing management of expanding too quickly and being impervious to advice on strategy.
Choppies’ own moment of truth came in September 2019 when shareholders and board members clashed openly over strategy.
The group refocussed its outlook and narrowed its footprint to a few markets.
“We are exiting from a few markets where the growth has been coming at the expense of Botswana and when we stop funding the loss-making areas, shareholders will see the value back to them,” Choppies CEO, Ramachandran Ottapathu told Mmegi at the time.
Letshego’s own dark times from the African strategy came from 2019 to 2022, with an exodus of top executives, including CEOs, amidst an increasingly public shareholder fallout over strategy.
From the Ugandan groundbreaking, Letshego took its business model based on Deduction at Source (DAS) and later backed by deposit-licences and the Micro and Small Enterprises (MSE) portfolio, to the rest of Africa. The almost inevitable wave of Africa challenges and dynamics hit and in 2019 at least P2 billion was wiped off the group’s market value as the share price plummeted.
The microlender’s shareholders fought over board memberships, directors’ remuneration, how to recover from the slump and even ‘passive versus active’ asset management approach, but the heart of the matter was the African expansion.
Like Choppies, when Letshego’s expansion into Africa faltered, the Botswana headquarters were forced to bankroll or underwrite the risk taken, to the irritation of shareholders, many of them based on home-soil and including pensioners.
While the microlender has largely brushed off the troubled years from its bottomline, returning to profits in recent financial periods, the impact of the challenges can be seen in the fact that since 2019, Letshego’s share price is down about 48.5 percent.
The numbers provided to shareholders ahead of the AGM indicate the challenge Letshego has faced in East and West Africa and why the exit was necessary, even at a loss. According to the details shared in the group’s 2025 annual report released on May 28, the subsidiaries being hived off were dragging Letshego down.
“Uganda and Nigeria saw a rise in non-performing loans, mainly due to underperformance of the DAS product, stemming from delayed employer payments and changes in deduction management systems. “Across both East and West Africa, deteriorating macroeconomic conditions, localised environmental pressures, and heightened recovery challenges, particularly in Non-Government DAS products and legacy MSE portfolios, contributed to increased portfolio strain and higher write-offs,” officials disclosed.
Going forward, directors and management are focussed on the leaner Letshego which has slimmed down from an 11-country focus to just Botswana, Namibia, Eswatini, Kenya, Lesotho and Mozambique. The Kenyan operations are due to be sold off separately, which will officially mark Letshego’s departure from East and West Africa.
“Letshego Kenya Limited has been excluded from the disposal group due to an ongoing legal consideration required to be closed prior to sale of shares,” officials said in the annual report.
For many Southern African businesses, the lesson has been that ambitions should be tested and sometimes even restrained to the immediate neighbourhood. When the pockets and patience deepen enough, only then can the tough terrain of East and West Africa be approached.
For Letshego, reality has caught up with what began as a dream 21 years ago.