Celebrating Letshego�s 18 years
Correspondent | Monday July 25, 2016 15:05
Letshego, as an organisation has made a huge impact on the lives of many Batswana across the country, as indeed it has on lives across the continent, and continues to do so today. This is not, by any means, the sole effort of the Letshego team. Rather, the Letshego story is the result of concerted effort, and that is very much what tonight is about – celebrating that collective ambition and achievement. We planted that narrative seed with the poetic rendition of the Letshego story as we opened up the evening, and I want to now share with you more of that. Before I do that, however, I would like to take this opportunity to thank our Guest of Honour, the Honourable Minister of Finance and Development Planning, Rre Kenneth Matambo, for gracing us with his presence tonight.
Also, I would like to thank John Burbidge, Letshego’s Chairman and his fellow Board members for their on-going support and counsel; you have been instrumental in providing strong governance through Letshego’s transformative journey.
At 18 years old, Letshego is “coming of age”, it is entering into “Adulthood” – its history speaks to the great parenting of Botswana that has helped driving positive, social change from within our borders to the rest of Africa and it is a story of continuing the tradition of “Botho”, or “Harambe” and unity within community – to this theme we have left “LetsTalk” cards in the story gallery outside this ballroom, and on your tables through the night. I invite you to share your stories on Letshego as the night progresses.
What does “coming of age” symbolize? 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. Letshego feels somewhat the same as I did back then - as John has shared, 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.
Let me start with our story of Growth
In 1998, our vision to improve the lives of the under-served government employee sector across Botswana was born, with the establishment of a small team of 30 professionals in Gaborone issuing loans of up to P1,000. A few years later in 2002 we were listed on the BSE, following which we attained our International Financial Services Centre accreditation.
In 2005 we first stepped overseas into Uganda, followed the next year by Swaziland and Tanzania. Since then, we have successfully diversified across Africa and today we have a presence in 10 countries, spanning Southern, East and West Africa where we offer a much broader based financial solution set, including flexible credit to savings, payments and micro-insurance services – through solving our customers’ needs in a simple, appropriate and accessible way, means that we now service over 300,000 borrowers, and 100,000 depositors. Further we employ over 2,300 team members, with around one third of these forming our commission-based sales force. Indeed we have grown to become Botswana’s largest and most profitable indigenous group, with a market capitalisation of 6 billion Pula – this ranks Letshego amongst the top 40 listed companies across sub-Saharan Africa (ex-South Africa).
We have grown our customer advances book to the value of some P6.5 billion as of December 2015, and for the first time in our history, we exceeded a profit before tax of1 billion Pula last year.
Looking to our footprint here in Botswana, we are represented in all regions of the country. We have disbursed over half a million loans totalling more than P6 billion to some 120, 000, 000 civil servants – much of this money has been used to fund borrower’s family education, to meet their health needs and to assist with home construction.
Profit–wise in 2015 our local subsidiary was ranked second against the banks in pre-tax profit terms and as a group we have contributed some P800 million to the government in taxes. Also we borrowed some P1bn from the banks in this market.
l In Kenya, we are the largest credit-only institution in the country, offering credit ranging for micro-and-small-enterprise loans, to funding of agriculture, education, health and housing facilities to MSE owners. Our civil servant loans business is growing well and is led by a Motswana based in Nairobi.
l In Rwanda our housing microfinance portfolio has grown well and following the issue of a deposit taking licence in 2014, we have rolled out savings offerings, converting most of our borrowers to savers. We are now looking to augment this with micro-insurance and other services.
l In Lesotho we are working to assist the Government and public sector in their drive to enhance education and provide affordable housing.
l In Mozambique, per the last annual KPMG Top 100 companies’ rankings, we were named as the 4th most profitable company in the financial services sector. Our business there has capability to offer a full range of services – and we are in the final stages of readying our 3rd party agency banking model for deployment across the country.
l And in Namibia, our customer base has grown such that we service over 50 percent of the Namibian civil service.
l Lastly, in 2015, we added two new businesses, both deposit-licenced entities, one in Nigeria (FBN MFB) and the other in Tanzania where we acquired a commercial bank, Advans Bank - in both countries we see enormous potential for developing our inclusive finance agenda.
In summary our steady growth in the financial services sector in our home market in Botswana, and across the continent, has borne testament to our responsive and inclusive solutions backed by a team of committed and passionate staff
Secondly, we are celebrating our story of Diversity
As our business has grown in scale, our growth has brought with it a diversity of talent, expertise and communities that make up our African heritage.
Our Letshego family represents 20 nationalities across our 10 countries inclusive of our subsidiaries in Kenya, Lesotho, Mozambique, Namibia, Nigeria, Rwanda, Swaziland, Tanzania and Uganda.
We have introduced international standards for performance management, talent development and learning and development programmes.
Also we have continued to diversify our accessibility for customers - we now hold deposit-taking licences in four-and-half markets (I’ll explain!) including Mozambique Nigeria, Rwanda and Tanzania, with Namibia likely to be confirmed shortly. We were awarded MasterCard principle issuer status in Mozambique early in 2016, providing a platform for card-based services, as well as mobile, internet and agency banking. These will complement existing channels in these countries.
Further we are providing for our customers’ financial needs through development of strategic partnerships - as I have indicated earlier we now can offer savings, borrowings, payments and insurance at a micro level across a number of our operations. Specifically in Botswana, we are pleased to find that our affordable housing product, that we piloted with previously excluded workers in the mining sector, has seen over 500 loans being disbursed, standing at a total portfolio of P131million in less than nine months – this must be a sure sign that further diversification in our home market will be welcomed by customers seeking appropriate productive financing.
Thirdly, we celebrate our story
of Improving Life
In all of our achievements as a business and as we celebrate our proud Botswana heritage and 18 years of growth, at the heart of our success lies our commitment to improving life - improving the lives of our customers and in turn improving the communities which we call home.
We remain committed to enhancing financial inclusion through helping the rural and under-served populations in every country we do business in - this is especially so when it comes to gaining access to financing for education, health, housing and business as this will drive measurable economic development over time.
For example in Botswana and Mozambique over 60 percent of our loan book is comprised of customers who reside outside of district capitals while in Tanzania; we reach over 95 percent of Government districts.
On the back of our service delivery model for access anytime, anywhere, and our commitment to being a responsible lender, we have begun a process that will allow us to measure our financial inclusion impact and our social performance.
Added to this, in East Africa we have scaled up our provision of asset finance for eco-friendly products, such as providing biogas financing for dairy farmers, water tank loans, energy-efficient ‘jiko’ stove loans and solar power financing - we are now looking to bring such “green” solutions to Southern and West Africa.
Our journey of improving lives and our commitment to financial inclusion was recognised recently when we were the first African private sector organisation to be admitted to partnership of the Alliance for Financial Inclusion – this is a global network of over 100 financial Government and Regulator policymakers from developing and emerging countries working together to identify and address areas that increase levels financial inclusion.
This partnership is already allowing us to advocate for financial inclusion policy reform and technical as well as regulatory innovation across sub-Saharan Africa.
Lastly, we have undertaken strategic social investment, or CSR, aligned to our inclusive finance strategy, with initiatives across our footprint that address socioeconomic issues.
On an annual basis, we set aside up to 1 percent of our profit after tax under our LetsCare umbrella. To this end, we have entered into a three-year partnership with the Directorate of Public Service Management, here in Botswana, to deliver financial literacy training to civil servants.
In addition, we are executing financial enterprise skills training in Tanzania, financial literacy community workshops for public servants in Uganda, and in Kenya, we have piloted an SMS system that will ultimately improve primary healthcare delivery in low-income areas across our footprint through enhancing the quality of diagnosis and treatment of non communicable diseases at grass-root levels.
From the moment we opened our doors in Gaborone in 1998 through today and beyond, what has set us apart from the rest is our deliberate positioning and clear focus to cater for those who conventional institutions see as “risky”.
We are humbled by, and proud of, our contribution in this niche that directly improves lives - through our assistance to the underserved, we have contributed towards Africa’s development and are committed to contributing on a greater footing going forward.
* Chris Louw The Letshego Group CEO was speaking at the 18th Anniversary Celebrations in Gaborone