Letshego resubmits bid for banking licence
Lewanika Timothy | Monday September 7, 2026 06:00
A banking licence would lower Letshego’s cost of funds and rebuild margins squeezed by years of taking beatings in East and West African markets.
The banking application license follows botched plans in 2018 when the group at the time chose to concentrate on expanding its operations and widening its product portfolio across its market.
Since exiting its East and West African footprint, the microlender now says it wants to develop deeper roots in the SADC region where it operates and secure a banking licence in its home market to attract cheaper capital through deposits as opposed to institutional borrowing.
During a briefing on the interim results recently in Gaborone, Group CEO, Reinette van der Merwe, confirmed that the microlender had no plans to enter new territory.
'We aren't looking into any new markets; our growth strategy is to focus on SADC for the foreseeable future,' she said. “And I can update that we have put up a bid for a banking license with the regulator, the Bank of Botswana. “The move is necessary in order to allow Letshego to get access to cheaper funding.”
Letshego Botswana saw its after-tax profits for the six months to June flat at P104 million, with tight liquidity and elevated funding costs cited as the major constraint on lending and margins.
Group-wide, profit after tax climbed 25% to P226.9 million, but the improvement leaned heavily on a 62% drop in credit impairment charges rather than fresh revenue. Operating income from continuing operations fell eight percent to P957.5 million, dragged down by a 28% decline in non-funded income.
A banking licence would let Letshego take retail deposits in Botswana for the first time, swapping expensive wholesale and bond funding for cheaper customer deposits. It is the same model already at work in Namibia, licensed since 2016 and now the group's best-performing market, with profit up 12% to P208 million for the interim period.
The strategy shift follows a bruising retreat from East and West Africa. Letshego exited operations in Ghana, Nigeria, Rwanda, Tanzania, and Uganda, markets it had built up between 2012 and 2017 during an earlier era of continental expansion. The group has sold the units to Mauritius-based Axian Digital Venture Holding for roughly $62.7 million, taking a loss of P281 million on the deal.
The cost of the African expansion was long a bone of contention between shareholders, triggering a P570.7 million impairment in the group’s 2025 results and pushing the group to a consolidated loss after tax of P235.5 million, more than double the prior year's loss.
Only two of the five units sold, Tanzania and Ghana, were profitable in their last full financial year under Letshego ownership, though Ghana's final results before the handover showed a sharp turnaround.
Once the sale closes, subject to regulatory approval in each market, Letshego will operate in six countries instead of 11, all of them in Southern Africa.
Van der Merwe has described the smaller footprint as central to freeing up capital and sharpening the group's competitive position.