Letshego tackles high indebtedness
Pauline Dikuelo | Tuesday November 25, 2014 08:45
“The purpose of this campaign is to impart the basics of personal financial management such as budgeting, financial planning and discipline in order to increase financial literacy in Botswana.” CEO Fred Mmelesi told a media briefing On Friday.
Mmelesi highlighted that this followed after their half-year results ended 31 July indicated that there are high rates of indebtedness locally. He noted that the increasing volumes of household debt in the country are a concern for banks, government as well as regulators, like NBFIRA.
“Letshego is equally concerned, hence we deemed it just fit and equitable to embark on a nationwide campaign to sensitise the working class and populace on financial literacy. This noble initiative seeks to achieve the objective of educating the public about personal financial management and to fulfill a promise we made to the leadership of this country,” he said.
While the level of indebtedness among the commercial banks is stabilising, the level of household debt is worsened by the absence of credible data on individual commitments to hire purchase schemes, salary advances, funeral schemes and informal credit arrangements.
For his part, the Assistant Minister of Presidential Affairs and Public Administration, Phillip Makgalemele, applauded Letshego for this initiative. He noted that it will improve the quality of people’s lives, especially looking at how a considerable number of Batswana tend to live beyond their means.
“This initiative seeks to improve and preserve the financial wellbeing for its customers. Over the years, I have observed Letshego’s commitment to CSI and cannot help but describe it amongst the most admirable and consistent in the country. Conspicuously Letshego’s programme stands out.”
He added that this initiative would drive and support measurable social change, noting that “clearly the working class in Botswana is over indebted and may be attributed to many reasons, the underlying factor being financial literacy”.
“I commend Letshego for the budget and time it has invested in this cause and the impact shall be visible for all of us to see once the training has commenced. I understand it will entail savings, retirement, insurance, investing and even credit or loans.” added Makgalemele.
The company’s personal financial management trainers and coach, Nelson Letshwene of Moeti Learning Technologies, will conduct the campaigns.
According to Letshego’s half year ended 31 July, their loan book jumped 31 percent to reach the P5billion mark in the six month period, strong advances growth in three of the 10 countries the micro lender operates in. Their most contribution to the growth in advances is Botswana, Mozambique and Namibia.
The group’s profit before tax increased by 11 percent to P508million, which Chris Louw, Letshego Managing Director, said the increase was due to higher debt levels in the business. He said the Government has raised a concern about high levels of indebtness, adding that they have introduced a central system in which they limit the amount of loans a customer applies for.