The pan-African financial services provider, headquartered and listed in Botswana, has achieved a significant reduction in non-performing loans (NPL) and improved collections across its loan book. As of December 2024, the Group’s NPL ratio dropped to 8.4 percent (P783m) of the gross loan book, down from 9.6 percent in the previous period. The Portfolio at Risk (PAR) over 30 days also improved substantially to 11.6%, compared to 14.4% recorded at the end of for the year 2023. The improvements were partly attributed to the strategic write-offs of underperforming loans particularly short-term and non-Deducted at Source (non-DAS) loans as well as enhanced collections and recoveries from new loans originated in 2024. “Despite these positive developments, credit write-offs into NPLs rose in Botswana, Kenya, and Lesotho,” stated executives in the report. During the reporting period, in Botswana and Lesotho, non-DAS loans underperformed relative to initial expectations, resulting in higher default rates.
In Kenya, macroeconomic headwinds, including environmental risks and increasing difficulties in loan recovery, especially within non-DAS and legacy micro and small enterprise (MSE) portfolios led to heightened write offs and a deteriorating risk profile. Letshego’s net credit impairment charges for the year surged to P783 million, up from P457 million in 2023. This rise was driven primarily by elevated delinquencies in non-DAS loans in Botswana and Lesotho, and short-term lending in Kenya. The company also faced increased legacy write-offs and greater operational risks that pushed impairment levels higher. The group’s Deducted at Source (DAS) loans, however, continued to anchor portfolio quality and performance. Comprising 84% of the total loan book, DAS loans maintained a strong footing, with an aggregated loan loss ratio of just two percent. This reflects both stability and solid growth in the group’s core lending segment. Botswana, Ghana, and Kenya collectively accounted for 85% of the total increase in expected credit loss (ECL) across the group. In Botswana, impairments were largely linked to the non-DAS segment, whilst in Kenya, the MSE portfolio contributed significantly to the increased provisions. Remediation efforts are underway across several markets, particularly in Kenya and Eswatini, where non-DAS and short-term loans have shown early signs of recovery. The group remains focused on improving asset quality and recalibrating risk management strategies in its more volatile markets. Letshego operates in 11 sub-Saharan African countries, offering inclusive financial services tailored to individuals, MSEs, and under-served communities. Despite market pressures, the group continues to pursue sustainable financial inclusion through simple, accessible, and impactful financial solutions.
